Kava

What is Kava (KAVA)?

Kava’s vision is to be the definitive cross-chain platform using a co-chain architecture that makes it interoperable with many of crypto’s biggest blockchains and dApps.

Kava is a fast, layer-one blockchain that forms a single, scalable network while integrating Ethereum and leveraging the modularity of Cosmos. This allows developers endless freedom and access to two of blockchain’s biggest ecosystems.

Kava’s roots lie in decentralized finance, but interoperability was always part of its core. Working with multiple assets across different blockchains, Kava still provides a decentralized alternative to centralized crypto lenders with its suite of DeFi products.

Kava Mint, Kava Lend, and Kava Swap originally got Kava off the ground, and they remain vital parts of the Kava ecosystem. They have plenty of competition, though, since popular platforms like Curve and Beefy, among others, have also integrated with Kava.

When Was Kava Launched?

Kava was developed by Kava Labs, a for-profit company established in 2018. The KAVA token was launched in 2019 via an Initial Exchange Offering (IEO) on Binance in 2019, raising $3 million.

Kava went live as a decentralized lending platform in June 2020, with Binance’s native BNB token used for borrowing USDX in the protocol now called Kava Mint. Within just two months of operation, $24 million worth of BNB was locked into smart contracts, with 8 million USDX borrowed.

Since then, Kava has iterated constantly with platform upgrades and launched Kava Testnet version 11 in June 2022.

Who are the Founders of Kava?

Kava was founded by Scott Stuart, Brian Kerr, and Ruaridh O’Donnell via Kava Labs.

Stuart, the current CEO of Kava Labs, is a serial entrepreneur with several projects under his belt. He is also a former professional poker player.

Brian Kerr is the former CEO of Kava Labs, who handed the role over to Stuart after a tenure from 2017 to 2021. Kerr was previously an advisor to various digital asset firms, including Snowball and DMarket.

Finally, O’Donnell has a Master’s degree in Physics, and he worked as an engineer and data analyst at Levelworks.

How Does Kava Work?

Kava’s architecture is based on a structure which employs co-chains that allow it to reap the benefits of both Cosmos and Ethereum simultaneously.

The Cosmos Co-Chain is a highly scalable and secure blockchain developed with the Cosmos SDK. Thanks to this Cosmos Co-Chain, Kava can now connect to the 30 chains and over $60B Cosmos ecosystem via the IBC protocol.

The Ethereum Co-Chain, meanwhile, is an Ethereum Virtual Machine-compatible execution environment. This empowers Solidity developers and their dApps, letting them take advantage of Kava’s scalability.

Kava also has a development program worth $750 million called Kava Rise, where developers can submit projects. These developers can develop on either the Ethereum Co-Chain or Cosmos Co-Chain and take advantage of whichever set of features they most desire.

Kava started out as a decentralized finance platform, and Kava Lend, Kava Mint, Kava Swap, and Kava Earn remain robust DeFi protocols. These platforms are run by smart contracts or modules, including an auction module, a CDP module, a liquidator module, and an oracle or price-feed module.

While the other modules are standard, Kava’s CDP module is a special sort. Referring to a Collateralized Debt Position, this is an automated loan contract used to mint the US dollar stablecoin USDX. On Kava, users can stake tokens like BNB as collateral to mint USDX. USDX is Kava’s native stablecoin and integral to Kava Mint.

Kava Lend brings an autonomous money market protocol to the Kava ecosystem. It allows crypto asset holders to deposit crypto assets, not limited to ERC-20 tokens, and use them as collateral for permissionless borrowing and lending. When users supply and borrow using Kava Lend, they are given a Kava native asset called the HARD token.

What Makes Kava Unique?

Kava is unique because of its co-chain architecture, connecting it to the massive ecosystems of both Cosmos and Ethereum.

This is brought together by the Tendermint consensus engine, and bridges link the co-chains with their respective external ecosystems. An ETH bridge links Kava’s Ethereum Co-Chain with Ethereum, and an IBC bridge links Kava’s Cosmos Co-Chain with Cosmos.

The Kava DAO governs the entire network, but two key modules allow the two co-chains to work together. These are the On-Chain Incentive module and the Translator module.

The Translator module connects the two distinct execution environments of the two co-chains, letting them work together at scale seamlessly.

These modules are a product of the Cosmos SDK, with which Kava was built. As new open-source modules are developed for the Cosmos ecosystem, Kava can quickly and easily implement them if desired.

Kava also allows other tokens to be issued on its network. These non-native asset tokens are also used to “wrap” or represent assets on other chains. This is done via cross-chain swaps, with the tokens being frozen on their native chain and minted on Kava.

Double wrapping is also possible. BTCB is a token representing Bitcoin tokenized on Binance Chain. This BTCB token can then be frozen on Binance Chain and minted as BTCB (Kava) on the Kava network.

Finally, gas is mandatory, but fees are optional on Kava. Users don’t have to include a fee on top of gas when making a transaction but can do so to grant the transaction a higher priority level. If the network is busy, these higher-priority transactions are completed first.

How is the Kava Network Secured?

Kava is secured by Tendermint, a proof-of-stake Byzantine Fault Tolerant consensus mechanism that enables fast transactions at scale. Tendermint ensures low fees and can still function even if up to 1/3rd of system nodes fail to follow the network’s protocol.

There are over 200 nodes validating blocks on KAVA as of August 2022. These are decided by checking which nodes have the highest weighted bonded stake in KAVA tokens.

Validators are incentivized by block rewards in KAVA tokens as well as a share of transaction fees on the network. On the other hand, they are also punished for misbehavior. This includes failing to ensure high uptime or double signing transactions by a strict slashing regime.

Meanwhile, Kava’s DeFi platforms also have to maintain a certain level of safety beyond blockchain consensus. DApps are often examined and audited by specialist firms, and Kava’s modules have been audited by Certik.

What is the Use of KAVA?

KAVA is the native token of the KAVA network. Its primary uses are staking and governance.

KAVA holders who stake their tokens are rewarded, as is common with most, if not all, proof-of-stake blockchains. Staked KAVA can then be used to vote on proposals that can extend to all parameters of the Kava network.

KAVA holders vote on what types of assets and dApps are supported, what the assets for debt collateral are, and what different financial parameters are instituted into Kava’s DeFi platforms.

The Kava treasury and the Kava SAFU fund are also governed by voting, just like the rewards payouts on incentive programs.

Who Controls Kava?

The Kava network is governed by the Kava DAO, a fully decentralized autonomous organization. On the other hand, the Kava DAO is made up of Kava stakers and validators that help to run the network.

The Kava DAO operates on a liquid democracy model that determines how the network functions and what changes should be made to it. It also decides how on-chain incentives via the Kava Rise program are distributed between the two co-chains.

How Much KAVA Is In Circulation?

Kava has a circulating supply of around 300 million KAVA, although it doesn’t have a defined total supply. However, there are no remaining KAVA tokens in vesting or lockups, meaning the only additions to the KAVA supply come from network emission.

Kava conducted a series of private sales and launched via a Binance Launchpad IEO in 2019. The launchpad sale gave “Binancians” a chance to pick up 6.52% of the total supply, while a whopping 40% went to private investors.

25% of the KAVA supply went to Kava Labs, and the remaining 28.48% was assigned to the Kava Treasury.

How Do You Buy KAVA?

You can buy KAVA tokens on several cryptocurrency exchanges, including decentralized exchanges like Kava Swap.

Binance is one of the easiest exchanges to buy KAVA from, especially since they hosted Kava’s IEO and are a Kava validator. Binance’s BNB token was also the first token that could be used on Kava to mint USDX.

However, Kava does also have a presence on plenty of other exchanges, such as Kraken, KuCoin, Huobi, and Gate.io.

Is It Possible to Buy Kava Instantly?

Kava is a very fast network thanks to its use of Tendermint consensus. As a result, whether you’re buying KAVA on a DEX or a CEX, transactions are practically instant.

How Do You Store KAVA?

Cryptocurrencies like KAVA are stored in wallets, which usually fall under “cold” wallets and “hot” wallets. Cold wallets keep keys offline and are considered very safe, while hot wallets connect to the internet and tend to be more convenient to use.

KAVA is compatible with popular Web3 hot wallets like Metamask, thanks to the Kava EVM module. Kava’s documentation provides a tutorial on how to set up Metamask for Kava EVM.

It must be noted that there are KAVA tokens on other blockchains as well, such as the Binance chain. These BEP-2 KAVA tokens should not be sent to Kava EVM, and users need to make sure they select the right network when sending and receiving tokens.

Is KAVA a Good Investment?

The KAVA token doesn’t have a maximum supply and is, by nature, an inflationary cryptocurrency. However, that doesn’t disqualify it from potentially being a very good investment.

In fact, simply staking KAVA and claiming a share of its emission should do plenty to offset the token’s inflation. This also allows users to actually vote on the direction of the protocol, as was designed.

KAVA is mainly a governance token, and the platform has given many investors a lot to be excited about. Right from the start, Kava offered something different: a decentralized alternative for crypto borrowing and lending that wasn’t based purely on Ethereum.

Kava is built around the idea of interoperability, and this could well be the future of the still-nascent cryptocurrency industry.