What Is Kava?
Kava is a cross-chain DeFi lending platform that allows users to borrow USDX stablecoins and deposit a variety of cryptocurrencies to begin earning a yield.
The Kava DeFi Network operates like a decentralized bank for digital assets, allowing users to access a range of decentralized financial services, including its native USD-pegged stablecoin USDX, as well as synthetics and derivatives. Through Kava, users are able to borrow USDX tokens by depositing collateral, effectively leveraging their exposure to crypto assets.
Built on the Cosmos blockchain, Kava makes use of a collateralized debt position (CDP) system to ensure stablecoin loans are always sufficiently collateralized. If a borrower fails to maintain their collateral above a required threshold, the Kava liquidator module will seize collateral from failing CDPs and send it to the auction module for sale.
How KAVA Token Works
The Kava token is one of the DeFi cryptocurrencies on the market. Its popularity is fueled by its decentralized platform that enables users to deposit a variety of native assets. These include Bitcoin, Ethereum, and Litecoin, which must be wrapped in Binance Chain (BEP2) assets. It also features a stablecoin money market that allows users to earn APY by minting USDX stablecoins. These can be contributed to Kava’s money market and yield a variable APY.
The Kava system works with the USDX cryptocurrency and mints USDX to serve as the lending currency. The USDX cryptocurrency is used in lending operations and users are rewarded with KAVA crypto every week for supporting the lending service. The protocol is flexible and connects to many other protocols, platforms, and blockchains. Its integration with Cosmos aims to facilitate integration and interoperability of different blockchains. It will also allow users to add many different tokens to the protocol.
The KAVA token has a variety of uses. The Kava platform is a decentralized finance platform, and its token invites holders to participate in its activities and parameters. For example, holders of the Kava token will be able to vote on what new assets should be added to the network. The users will also have the opportunity to determine how rewards are calculated in the markets.