Kava is a software protocol and it enables in borrowing and lending assets without the need for a traditional financial intermediary. In this way, Kava is considered one of the promising projects in decentralized finance (DeFi). How Kava works? Although most DeFi projects are built on Ethereum, Kava is built on Cosmos, which, according to […] The post How does Kava crypto work? appeared first on ZebPay | Buy Bitcoin & Crypto.
Kava is a software protocol and it enables in borrowing and lending assets without the need for a traditional financial intermediary. In this way, Kava is considered one of the promising projects in decentralized finance (DeFi).
How Kava works?
Although most DeFi projects are built on Ethereum, Kava is built on Cosmos, which, according to its creators, offers enhanced features.
The Kava DeFi hub functions as a decentralized bank for varied digital assets. It allows users to access a variety of DeFi services, including USDX, the stablecoin pegged on US dollar, as well as synthetics and derivatives. Users can borrow USDX tokens from Kava by submitting collaterals, thereby leveraging their exposure to crypto-assets.
Outlined below are the hallmarks of Kava platform:
Depositing crypto – Users can deposit their cryptos by connecting to their wallets.
Securing the assets – Kava uses a smart contract to secure the deposited crypto assets.
USDX loans — Based on the CDP’s value, users can avail USDX loans.
Close a CDP – To release their collateralized crypto, users can refund the loan, by paying an additional charge.
Withdraw crypto – Kava destroys the USDX, once users receive their crypto assets.
The technology behind the Kava platform remains cutting edge. In order to maintain robust security, the platform uses a “Tendermint-based Proof-of-Stake (PoS)” consensus mechanism..
The KAVA Token
The entire Kava ecosystem currently has three different tokens. These are the KAVA token, the USDX stablecoin, and the HARD token. The KAVA token is the native governance token on the Kava platform. The token enables the network to stay secure and perform mechanical functions on the platform. In addition to that, users can also collateralize their crypto assets in exchange for USDX. Lastly, the HARD token is also a governance token. It is used to incentivise early participants and allow them to actively take part in the evolution and management of the protocol.
Benefits of KAVA ownership
Ownership of KAVA allows you to be a part of the decision-making process for network updates. Moreover, token holders can send proposals and vote on them. Furthermore, users can vote on the specific parameters of the collateralized debt position (CDP) system.
Kava seeks to streamline the whole sector of decentralized lending by skilfully integrating a variety of proprietary technologies. Kava was developed to provide stablecoins and decentralized lending against all major crypto assets in a simple and transparent way. Consequently, Kava has become a pioneer in the DeFI sector that makes financial services accessible to one and all.