At 22 o'clock on November 5th, Beijing time, Kava, a Cosmos-based cross-chain DeFi platform, has officially launched its mainnet. Users can directly participate in network governance through the transaction and holding of KAVA tokens on the Kava main network. Kava revealed that more than 100 verification nodes will join soon after the mainnet goes live.
Kava came into the public eye because it became the tenth IEO project of Binance. Because they are all collateralized loans in the stablecoin model, it is often considered the MakerDAO in the Cosmos ecosystem.
MakerDAO has occupied more than 50% of the market share in the Defi field for a long time, but it also has many problems. Can Kava, which is very similar to MakerDAO, have an impact on this Defi king?
In view of the fact that MakerDAO supports few types of assets for mortgage (currently the only supported mortgage asset is ETH, a multi-asset mortgage proposal has recently been proposed), and the weak bearing capacity of the ETH chain, Kava is based on the cross-chain technology of cosmos and supports BTC, XRP, BNB, ATOM and other multi-asset mortgage loans.
Kava's product design is the same as MakerDAO. Users also need to first create a CDP smart contract account, which will keep the mortgage assets and generate USDX stable currency to lend to users. When the user returns USDX, the smart contract will return the mortgaged assets to the user and generate a stable currency rate at the same time.
The main issues that everyone is more concerned about during the lending process are the types of supporting mortgage assets, stable fee rates, pledge rates, and liquidation rates. Currently, Kava supports BTC, XRP, BNB, ATOM as mortgage assets, the initial rate is 5%, and the pledge rate and liquidation penalty rate are both public.
Similar to MakerDAO is Kava's token economic mechanism. Kava's system circulation currency is KAVA, which is a deflationary token used for incentives, rate settlement, voting and other scenarios.
1. Motivation:
Kava's consensus mechanism is POS, and users can obtain rewards by staking KAVA or entrusting staking.
2. Rate settlement
When users repay their debts, they need to pay a certain rate, which is denominated in USDX but paid in KAVA. The non-stability fee rate is 5%, which can be changed by voting by KAVA holders
3. vote
The key parameters of the Kava platform are controlled by KAVA holders, such as stable rate changes, CDP pledge ratios, liquidation penalties when the collateral ratio is lower than the required ratio, etc. For example, the current stability fee is 5%, if KAVA token holders think the stability fee is lowered, they can submit a governance proposal to change the stability fee to 3%. If the proposal is approved by 50% of the KAVA token votes, the proposal will pass. But like MakerDAO, Kava does not seem to have given specific preventive measures for the resulting monopoly of voting rights.
As the first cross-chain DeFi product, Kava also has a first-mover advantage while directly hitting the pain points of the market. However, judging from the white paper it gave, a few short pages of PPT did not give a detailed design. Moreover, MakerDAO currently occupies 72% of the DeFi market, and there should be a long way to go if it wants to surpass and win the Touba transaction.
team introduction:
Brian Kerr (CEO): Former CEO of Fnatic Gear and Func, advisor to Snowball and DMarket.io.
Ruaridh O'Donnell (Product Manager): Former Levelworks engineer and data analyst, deep learning expert.
Scott Stuart (Blockchain Development Leader): Former CEO of Levelworks, professional poker player.
Kevin Davis (Developer Lead): Former USDA software developer and data analyst.
Stan Press (Marketing Director): Formerly Head of Esports Partnerships at VY, Managing Director of Gaming and Digital Strategy at Magid.
Aaron Choi (Commercial Director & Asia Development Strategy): Former CEO of GJ Exchange, Vice President of Chinapex Global Partnership, Vice President of BTCC International Exchange.
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References:
DeFi is coming to the universe
Kava: Cross-chain DeFi | DemoShow Online (No. 61)
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