Kava (KAVA) is a decentralized finance (DeFi) platform built on the Tendermint Core. founded by Brian Kerr, Ruaridh O’Donnell, and Scott Stuart in 2018, Kava aims to provide an alternative to traditional financial intermediaries through a decentralized lending system.
The platform’s native cryptocurrency, KAVA, can be used alongside USDX for loans. Users can lock cryptocurrencies into smart contracts, minting USDX and earning KAVA rewards, which are determined by the type of collateral and the amount of USDX minted. This approach encourages the use of various assets as collateral. Kava's compatibility with the Cosmos ecosystem allows it to support a wide range of major cryptocurrencies, including XRP, BNB, and Bitcoin.
Kava's stability mechanism operates through collateralized debt positions (CDPs), where users over-collateralize loans to protect against market fluctuations. The platform's governance model employs KAVA tokens for voting on network decisions, including the selection of collateral types and fee adjustments. This model also involves delegating KAVA to validators, who play a crucial role in maintaining the network's security and managing stability fees distribution.
The introduction of MINT, a governance token, marks Kava's effort to further decentralize its decision-making process. This step is part of Kava's strategy to develop a comprehensive and user-friendly DeFi ecosystem. With a strong technological base and a focus on future growth, Kava seeks to enhance the accessibility and security of decentralized financial services.
The project launched with a token sale on Binance in 2019, raising $3 million by offering 6.5% of KAVA's total supply. By June 2020, Kava introduced a lending service that accepted BNB as collateral for USDX loans, quickly securing $24 million in BNB.
