DeFi Coming to Cosmos. – Kava Labs Blog
Since the launch of Cosmos, pegged assets are making progress: the first design and specification for a Bitcoin peg zone was published, a fully functional Ethereum bridge was just released, and numerous other peg zones are in the works for other major assets, including Kava Labs’ specification for an XRP peg zone.
With the foundations for asset movement well underway, all that is needed are great venues for them to be used in order to cause a swell of value to be injected into Cosmos.
By applying our expertise in cross-chain settlement, Kava Labs has developed a new technology set that combines the benefits and interoperable functionality of Cosmos with DeFi applications traders want today.
Users can use any asset supported by Cosmos as collateral in Kava, making it accessible to more assets than any existing DeFi platform. Today, Kava’s primary goal is to bring DeFi to assets that otherwise wouldn’t have access. One of Kava Labs first initiatives is applying our cross-chain expertise to bring XRP to Cosmos and provide DeFi services to it. We will be moving to support other assets shortly thereafter and collaborating with other peg zones.
The first products built using Kava allows users to access decentralized leverage and hedging. Kava platform users can gain exposure on their crypto assets through margin trading and hedge using the USDX stablecoin as a stable store of value.
The Kava Token
The Kava blockchain is secured by Proof-of-Stake consensus and has a native token for securing the network called the KAVA token. KAVA tokens represent the ability to secure and participate in the governance of the Kava blockchain. Token holders can stake their tokens directly, or delegate them to a staking service provider. Staked Kava tokens have the ability to participate in the governance of the system, including deciding what types of collateral the system supports and how many stablecoins the system can create. For more information, see the specification.
Deflationary Fees
Users on Kava lock their cryptoassets as collateral and accrue fees on any USDX stablecoins they draw. These fees are paid for in Kava tokens and burned. During normal times, Kava users will close their positions and pay for the fees in Kava, resulting in a deflationary event for Kava tokens.
Inflationary Stabilization
In the event the system becomes under-collateralized due to a crash in the value of collateral, KAVA will be minted and sold for USDX until the required collateralization ratio is restored.
The Road Ahead
The framework for locking collateral in multiple assets and issuing USDX is built. Now the focus is on working with great validators to secure the Kava blockchain and building a community who wants to take ownership and participate in the governance of Kava. If you’re a validator who wants to work with us on launching Kava, email us at validators@kava.io.
Join the Conversation and Stay Up-to-date
RiotChat: riot.im/app/#/room/#kava-validators:matrix.org
Twitter: twitter.com/kava_labs
Telegram: t.me/kavalabs
Github: github.com/Kava-Labs
Published at Fri, 21 Jun 2019 22:38:03 +0000
