Some time ago, the news that "dYdX will build an application chain in the Cosmos ecosystem" has aroused widespread concern in the market, and also sparked a big discussion in the industry around project parties, application chains, Layer1, and Layer2.
Based on the current market situation, in the ecological competition that supports application chains such as Cosmos, Polkadot, and Avalanche, Cosmos is ahead of other competitors by virtue of its high ecological openness, comprehensive development tool support, and first-mover advantage. Status, the ecology has also bred a number of relatively powerful application chain projects, such as the upcoming dYdX, Terra, which was once in full swing, and our protagonist Kava today.
The Kava project was established in 2018. As one of the earliest projects in the Cosmos ecosystem, Kava built its own blockchain based on the Cosmos SDK early on, and deployed stable coins (Kava Mint), A set of DeFi portfolio protocols such as Kava Lend and Kava Swap. At the same time, Kava also issued the token KAVA as the governance token of the entire blockchain. It is not difficult to see that the path that Kava took in the early days is exactly the path of the current popular application chain. It can even be said that Kava embarked on this path earlier than some other typical application chain projects.
However, with the passage of time, perhaps due to the gradual need for more openness and combination in subsequent development, Kava's positioning began to gradually change to a general-purpose Layer1. Just in June this year, Kava just completed perhaps the most significant upgrade in the history of the project - Kava 10, and launched an "Ethereum and Cosmos common chain" that is said to be compatible with both EVM and Cosmos SDK development environments.
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Q1
Odaily: Recently, the news that dYdX has decided to build an application chain based on the Cosmos SDK has aroused heated discussions in the industry. As the earliest blockchain in the Cosmos ecosystem that also has functions such as stable currency, lending, and transactions, Kava can also be used to a certain extent. Understand it as an application chain, what do you think of this strategic choice of dYdX? What are the potential advantages of Lisk? Will this be the general trend of the future?
Scott：It is a very clever choice for dYdX to expand the new chain. While further decentralizing, it also extends upwards with new development potential. From the perspective of development path and composability, Kava can indeed be regarded as an application chain. At the beginning, Kava was also a single lending platform. Later, in order to maximize capital efficiency, it expanded multiple composable protocols and gradually developed into a public chain.
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Q2
Odaily: My understanding is that Kava took the path of the application chain in the early days, but in the recent several upgrades, it has gradually become a real general-purpose public chain. Can this be understood? Why did Kava make this choice?
Scott：The purpose of being a public chain is to solve a wider range of credit problems. In the early stage, Kava was committed to providing a set of general solutions for DeFi-related applications and developers to solve their underlying cross-chain technology, price feedback solutions and network security. and other infrastructure issues. Whether it is to upgrade or reduce the dimension to do public chains or applications, the essence depends on whether the team has the ability to build, develop, solve, product design and implement.
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Q3
Odaily: Kava officially launched the "Ethereum and Cosmos Co-chain" at the end of May. How should we understand the "co-chain" here? What is the specific difference from other ordinary Layer1s in our cognition?
Scott：After the Kava 10 upgrade, Kava Network has become a Layer-1 blockchain with lightning speed and a unique co-chain architecture. The "common" here is to make Ethereum and Cosmos compatible in the single network environment of Kava Network In , their respective characteristics are fused through specific functional modules. In this way, developers of the Kava Network ecosystem will have more choices. They can not only enjoy the speed and interoperability of the Cosmos SDK, but also experience the flexibility and developer support features brought by the EVM.
The reason why Kava made such an innovative change is that in the process of our development to Layer 1, we realized that there are currently some bottlenecks that cannot be broken through in Layer 1. Due to the limitations of the underlying technology, it is generally difficult or almost impossible to implement certain changes in the well-structured blockchain network. However, with the development of the industry, the needs of users and the continuous iteration of applications, if the Layer 1 blockchain wants to successfully establish a real and well-used Web 3 application ecosystem, it must provide services for those who want to transfer their products or assets. Provide a smooth transition to developers and users on the web.
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The two chains coexist in one network, regardless of the Cosmos common chain or the EVM common chain, their prosperity is part of the Kava network, and there is a great possibility to convert users of one common chain into users of another common chain, Cosmos The combination of co-chain and EVM co-chain is "1+1>2" of synergistic effect, and the cooperation is win-win.
Q4
Odaily: Kava has previously officially announced Kava Rise, a developer incentive program with a total value of 750 million US dollars. Has the program started? How long will it last?
Scott：Kava Rise is a transparent and fair on-chain incentive program aimed at bringing innovative developers in the DeFi, GameFi and NFT industries to Kava Network, and plans to deploy it on the Kava Ethereum and Cosmos common chain within 4 years High-quality projects are allocated 200 million KAVA rewards.
On June 8, the proposals related to the Kava Rise plan have been voted by the community and officially launched. The plan will revolve around the deployment of several key milestones, such as the Kava 10 main network, the Kava Ethereum cross-chain bridge and the Kava 11 main network, and is based on the Kava governance Roll out in several stages. Now that the first phase of rewards has been launched, when the plan is launched, the structure of Kava Rise will mainly focus on driving the adoption and growth of the new Ethereum common chain. In the first phase, 1 million pieces will be distributed every monthKAVAsecondary title
Q5
Odaily: Will the $750 million incentive be distributed in the form of KAVA tokens? This figure is even higher than KAVA's market value in circulation. How is the total value calculated?
Scott：Yes, Kava Rise allocates 62.5% of all block rewards to developers building on the Kava Ethereum and Cosmos co-chain through a unique programmatic financing model, and will be distributed between the two chains in the form of KAVA rewards , and transparently distributed on the chain according to actual usage.
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Q6
Odaily: In addition to the previously announced Sushiswap, what other projects will participate in Kava Rise? For more project parties who want to join in, how can they apply for Kava Rise's incentive allocation?
Scott：The first ecological fund of Kava Rise is 185 million US dollars, and projects such as Cosmostation, CertiK, Akash Network, Hummingbot, Elfin Kingdom, Celer Network, Formation.Fi, and Nervos have participated. SushiSwap is the latest partner to join and will work with Kava in Up to $7 million each for a total of $14 million in liquidity mining rewards within 90 days.
To join Kava Rise, just go to the official websitekava.io/riseComplete the registration, ensure that the smart contract of the project is deployed to the Kava Ethereum common chain andDeFi Llamasecondary title
Q7
Odaily: How can ordinary users profit from Kava Rise? Is the project party required to redistribute these incentives to users after receiving Kava Rise's allocation?
Scott：After developers are motivated, deploying their projects to Kava Network will also bring most of the financial rewards and users to Kava Network to maximize the benefits.
Take SushiSwap, which has recently joined the Kava Rise program, as an example. As part of the cooperation, Sushi andThe first Ignition Fund of Kava Ecological FundEach of them will provide up to 7 million US dollars in 90 days, a total of 14 million US dollars in liquidity mining rewards will be given to users, and will be equally distributed in the form of SUSHI and KAVA rewards.
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Q8
Odaily: What is the approximate rate of return for liquidity mining on mainstream projects in the Kava ecosystem?
Scott：The current mainstream projects in the Kava ecosystem are mainly Kava Mint, Kava Lend and Kava Swap. These three protocols allow users to complete the entire process of minting, lending, trading, and earning income through liquidity pools in Kava.
For novice users, Kava has launched the Kava Earn strategy. Users only need to complete the supply of assets and claim rewards, and the system will automatically help users perform operations between DeFi protocols. The first phase of the Kava Earn strategy recommends that users use Mint and Lend through BUSD to maximize returns. The potential annualized rate of return of this trading strategy is between 35% and 45%. The risk of providing stablecoin assets to Mint is very small . And for users supplying USDX to Lend, there is virtually no risk.
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Q9
Odaily: Kava does not seem to support MetaMask for the time being. The latter is currently the largest access portal in the Web3 world. This gap will obviously affect Kava's ecological growth rate. Is Kava moving forward on this point? Will the co-chain architecture bring some technical difficulties in wallet integration?
Scott：One of the main functions of the Kava 10 main network is to support users to encapsulate and decapsulate KAVA assets as ERC-20 on MetaMask, and freely transfer them through the Ethereum common chain or Cosmos common chain, while enjoying extremely low gas fees and Fast transfer speed. Encapsulation represents more application access and benefits for users and developers.
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Q10
Odaily: For many users, how to smoothly transfer funds into and out of Kava is also a difficult problem. What is the current progress of Kava in the deployment of cross-chain bridges? In addition to the official bridge, will you consider integrating more third-party cross-chain bridges?
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Q11
Odaily: A relatively serious question. A few months ago, the whole industry witnessed the collapse of Terra, the former Cosmos ecological leader. Affected by this incident, Kava’s native stablecoin USDX has not yet recovered its anchor. Kava plays an extremely important role in the ecosystem. This problem should be resolved as soon as possible before more new users enter the market. What is Kava's plan for this?
Scott：When the Terra incident occurred, Kava immediately established an orderly process for removing all Terra risk assets, ensuring the safety of platform users' funds. However, affected by UST, USDX did appear to be decoupled by arbitrage. In the past month, USDX is gradually recovering its anchor.
The anchoring of USDX has always been an important goal of Kava community governance. Unlike UST's high-interest deposit mechanism, USDX, like DAI, is backed by real collateral value. Due to the limitations of the Kava network in the early stage, most of the application scenarios of USDX are limited to the internal protocol of the Kava ecosystem. Kava has been stabilizing the value of USDX through community governance proposals.
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Q12
Odaily: From a longer-term perspective, although huge incentives can help Layer 1 achieve rapid growth in the ecological scale in the short or medium term, combined with the development of other ecosystems (such as Polygon, Avalanche, and Fantom) that have gone through the same path in the past , it seems that after reaching a certain bottleneck, the driving effect of external incentives will become smaller and smaller. What does Kava think about this? If the sustainability of external forces is limited, what is the fundamental driving force for an ecology to achieve sustainable growth? Does Kava have a longer-term plan for this?
Scott：Indeed, early huge incentives can help rapid growth, but it is also necessary to establish a sound mid-to-long-term incentive mechanism. In the Kava Rise plan, all rewards will be fully transparent and open within 4 years, and will be calculated and distributed monthly based on the time-weighted average TVL ratio. In other words, if a protocol deployed on the Kava Network wants to continuously obtain incentives, it must continuously obtain users and TVL. This mechanism is a bit like a validator node on the network. Only developers who make real and continuous contributions chance to benefit.
Income products have always been an important source of user growth. In addition to incentivizing developers to build and deploy on the Kava Network, Kava is also working to fairly distribute KAVA rewards on the Ethereum and Cosmos common chains to DeFi protocols and their users based on usage rates. We can see that SushiSwap has made a good example. After integrating Kava, the two parties jointly launched a liquidity incentive activity to attract more users to participate.
Based on the high sensitivity of the entire industry in terms of time dimension and income dimension, under the continuous influence of external forces, the driving force for maintaining growth lies in creating a complete application ecological chain. Under the emerging new market trends, the DeFi field is also facing a breakthrough, and it is necessary to get rid of the inertial thinking of path dependence and embrace new changes. In Kava Rise, developers in GameFi, NFTs and other Web3 vertical fields are rewarded quite generously. We hope to continue to see more vertical and innovative network applications, explore their integration opportunities with existing protocols, and jointly Constitute a diverse Kava ecological map.
