When it comes to cryptocurrency, there are various options available to investors. However, not all cryptocurrencies are created equal. Some, like Bitcoin and Ethereum, have been around for years and have proved to be relatively stable investments. Others, like KAVA, are newer to the scene but offer considerable potential. In this article, we will go into deep dives on KAVA and try to find the answer to the question: What happens when you combine the best of both worlds? So, if that sounds interesting to you — keep on reading!
Kava KAVA Overview
What Is Kava, Exactly?
Kava is a decentralized cross-chain lending platform that offers digital asset-backed loans. The Kava network is powered by the Kava protocol, which is a cross-blockchain application platform. Kava Labs is the company behind the Kava protocol.
Kava ecosystem contains three main products:
- Kava Mint, a lending platform where users can deposit crypto as collateral to borrow Kava’s crypto-backed stablecoin, USDX.
- Kava Lend (ex-Hard Protocol), a lending project from KAVA. On Kava Lend, users can borrow USDX as well as BTC, BNB, BUSD, XRP, etc.
- KavaSwap, an AMM product built on the Kava blockchain. KavaSwap connects liquidity from other blockchains, such as Ethereum and BSC.
Kava differs from other lending platforms because it uses a collateralized debt position (CDP) system. This system allows borrowers to put up their digital assets as collateral for a loan.
The Kava network features its own native crypto, the KAVA token, which is used as the utility and governance token of the Kava blockchain. The KAVA token was launched in 2019 after several private sales and initial exchange offerings (IEOs) on Binance Launchpad. KAVA holders have a powerful voice on the KAVA platform.
There’re also other governance tokens in the Kava network — namely, HARD for Kava Lend and SWP for Kava Swap.
How Does KAVA Work? How Is the Kava Network Secured?
Kava is powered by the Cosmos SDK and the Tendermint engine, which are both fast and secure.
The Tendermint team has also developed the Cosmos Network, which is a decentralized network of blockchains that use the Tendermint consensus algorithm.
The Cosmos SDK is an open-source software development kit that enables developers to build decentralized applications on the Cosmos Network. The SDK is based on the Tendermint Core, which is a Byzantine Fault Tolerant (BFT) consensus engine. The SDK provides a protocol for interacting with the network as well as a set of tools and libraries for building applications. The Cosmos SDK protocol allows KAVA to interoperate with other blockchains.
What the Kava network empowers developers with includes flexible deployment, on-chain incentives, and seamless interoperability.
KAVA History & Founders of Kava
Ruaridh O’Donnell, Brian Kerr, and Scott Stuart co-founded Kava Labs, a for-profit foundation that created Kava. Kava was introduced in 2018. During the IEOs in 2019, the team organized a public token sale on the Binance exchange, distributing 6.5% of the total supply of KAVA coins.
The Cosmos platform officially launched the Kava lending protocol in August 2020, enabling BNB to be used as collateral for crypto loans denominated in USDX. Since that time, Kava has documented loans totaling about $8 million in USDX and about $24 million in BNB that have been secured as collateral.
How to Stake KAVA?
Kava can’t be mined: it’s built on top of the Cosmos SDK protocol that uses a proof-of-stake algorithm.
Instead of mining, Kava relies on staking in its validation process and securing the network. Users can create their own nodes and stake KAVA or use pre-existing staking services.
As the best 100 nodes on the KAVA network receive the majority of the rewards, token holders should carefully choose which nodes they stake their tokens with. When selecting a node, it is crucial to consider factors such as the node’s reputation, track record, and fees. This way, token holders can maximize their chances of earning rewards.
Advantages & Disadvantages of Kava
Kava’s biggest advantage is its low interest rates. Average interest rates are currently around 5% APR, which is much lower than those of traditional lenders or centralized lending platforms. This makes Kava an attractive option for borrowers looking to minimize their costs.
Another advantage of Kava is its Fiat-to-DeFi gateway. This feature makes it easy for Kava users to get access to cash without having to go through the hassle and expense of converting their digital assets into fiat currency. Kava is one of the few lending platforms that offer loans in fiat currencies.
For these reasons, Kava is one of the best lending platforms for those who want to use their crypto assets as collateral.
However, Kava does have some disadvantages. One of these is that it is still a relatively new project yet to achieve widespread adoption. As a result, it remains to be seen whether Kava will be able to compete with established DeFi protocols, such as Coinbase, SALT, Aave, and others, in the long run. Additionally, Kava’s lending rates are variable and could rise significantly if the value of collateralized crypto assets decreases. This could lead to borrowers having difficulty repaying their loans and could end up with defaults.
KAVA vs Solana (SOL)
Experts recommend both Kava and Solana as tokens with the most potential to earn during bad market trends. Both of these options have their own unique benefits and drawbacks. Here’s a closer look at Kava and Solana (SOL) so that you can make an informed decision about which one is right for you.
Solana (SOL) is a blockchain platform that enables high performance and scalability. Its unique consensus algorithm, Proof of History (PoH), allows it to process 50,000 transactions per second. Solana also uses Proof of Stake (PoS) to secure its network. High speed and scalability are its main advantages. Solana can process transactions much faster than other blockchain platforms, such as Bitcoin and Ethereum. This makes it ideal for applications that require fast transaction times, such as online payments or trading. Security is yet another advantage of Solana. Its consensus algorithm ensures that all transactions are valid and cannot be tampered with. This makes it less likely to be hacked than other platforms.
However, Solana has a few disadvantages. Its high speed means that it uses more energy than other platforms. This could make it less sustainable in the long term. Additionally, its reliance on PoS could make it vulnerable to centralization if a small group of stakeholders controls the majority of the tokens. Speaking about the coin’s past performance on the market, it’s worth noting that despite being one of the top crypto performers in 2021, Solana plummeted in 2022: it fell down by 80% from its all-time high. SOL still hasn’t recovered yet, and its future holds a lot of uncertainties.
Overall, while Solana is a fast and scalable blockchain platform that boasts significant advantages, it has some disadvantages too, and one should consider them before investing.
We have already discussed KAVA’s pros and cons, so let’s do a quick recap. One of the key benefits of Kava is that it offers extremely low interest rates on loans, making it a great option for those looking to save money on interest payments. Next, it is the first DEX to offer the Fiat-to-DeFi gateway. As for the downsides, Kava doesn’t offer as many loan options as some other lending platforms out there do. Plus, one should also note its lack of popularity and adoption.
KAVA’s behavior on the crypto market is calm, with no sharp ups and downs. Before the beginning of the crypto winter, the token showed smooth growth, and the public was getting increasingly more interested in the project.
Ultimately, the decision of whether to choose Kava or Solana (SOL) will come down to your individual needs and preferences. None of the content on Changelly is investment advice, nor is it a replacement of advice from a certified financial planner. Before deciding to buy Kava, we recommend you to do your own research.
How to Buy KAVA?
If you’d like to buy KAVA, you can easily do it on our exchange.
The first step: open the Buy page. Select the pair of fiat currency and crypto you’d like to exchange. In our case, it is KAVA and USD. Alternatively, you can also exchange other crypto assets.
Next, fill out the “You spend” field to set the amount you intend to pay for the token. The service will automatically determine how much crypto you’ll get in return for this sum.
After that, you must select the payment option you prefer. Then, enter the address of your cryptocurrency wallet, where your tokens will be transferred, and your card details. You can open a crypto wallet straight away on the same page if you don’t already have one. Before moving on to the following stage, please double-check your wallet address because cryptocurrency transactions are irreversible.
Finally, you need to confirm the payment. After a few minutes, you will receive your newly purchased cryptocurrency in your wallet. It’s a very quick process, and you can buy KAVA while reading this article.
FAQ: Everything You Need to Know about KAVA
Is KAVA a coin or a token?
KAVA is a token.
Is KAVA built on Ethereum?
No, Kava is built on the Cosmos SDK. Kava aims to combine Ethereum and Cosmos blockchains into one scalable network.
Is KAVA a stablecoin?
KAVA is not a stablecoin. It’s a utility and governance token of the Kava blockchain.
The Kava network’s native stablecoin is called USDX. It has recently lost its parity with the US dollar, and those two are no longer equal. According to CoinGecko, this stablecoin had a market worth of more than $115 million prior to the depeg.
How old is the Kava crypto?
It was launched in 2019.
Who owns Kava?
Kava Labs does. Kava Labs shareholders control 25% of Kava tokens.
Does Kava have a max supply?
KAVA tokens’ maximum supply is currently uncapped.
Is KAVA good crypto? Does KAVA have a future?
Experts’ and the crypto community’s consensus on KAVA is positive, based on the assumption that Kava might be a good investment because it is a low-risk, high-reward asset. With the crypto community being excited about the upcoming launch of Ethereum Co-Chain and Cosmos Co-Chain, the KAVA price continues to trend upward.
As more people use the Kava network, the demand for KAVA tokens grows, which should manifest in an increase in the price of KAVA tokens. Kava is one of the most promising lending platforms in the crypto space, and many people believe that it has a great bright future.
How do you make money from KAVA?
You can earn money by staking KAVA. It is done either by running your own staking node and earning straight from the protocol or by delegating it to third-party KAVA staking services.
Disclaimer: Please note that the contents of this article are not financial or investing advice. The information provided in this article is the author’s opinion only and should not be considered as offering trading or investing recommendations. We do not make any warranties about the completeness, reliability and accuracy of this information. The cryptocurrency market suffers from high volatility and occasional arbitrary movements. Any investor, trader, or regular crypto users should research multiple viewpoints and be familiar with all local regulations before committing to an investment.