TopDao X Kava Interview Recap
A few days ago, TopDao had an interview with Aaron Choi from Kava, the first cross-chain DeFi platform of Cosmos. Here is a quick recap of the interview!
Carter: First of all, Aaron, can you briefly introduce Kava to us? It’s necessary for the new friends.
Aaron Choi: Hi everyone. Thank you for inviting me to the TopDao community and to be able to share some of the things happening at Kava. Kava is a Layer 1 blockchain, and is the first DeFi chain built using the Cosmos SDK. We focus on building cross-chain DeFi services like borrowing and lending. Currently, we have 2 Dapps on our chain, our Kava CDP protocol and HARD money market. Through our protocol, we allow assets like BTC, XRP, BNB, BUSD across different chains such as Binance Chain and Heco, to be used as collateral and also to be lent out for loans. We also have a stablecoin USDX that is overcollateralized by assets in the Kava CDP protocol.
Our tokens KAVA and HARD represent the governance structure of our two Dapp protocols, where holders determine the growth of these dapps via on-chain voting on governance proposals. These tokens are also traded on most major exchanges at the moment.
Carter: We know that Kava just finished upgrade to Kava 5 this April, can you tell us about Kava 5, and is Kava 6 in the planning?
Aaron Choi: Kava 5 was the most recent mainnet upgrade that we completed on April 8th. This upgrade included major improvements to on-chain scalability and security. We increased the limits for cross-chain swaps as well as improved wallet interactions by building a WalletConnect bridge for Trust Wallet users. We also introduced HARD V2, which opened up borrowing of assets on the protocol.
For Kava 6, we will be launching a few new products. First, our Kava Swap will be launched. Second, we will introduce the SAFU Fund, which will protect user assets on our platform if we encounter any black swan events. Third, we will be introducing KAVA staking derivatives, increasing the liquidity of KAVA tokens.
Carter: So can you share a little more about how are Kava Defi platform reallocating KAVA rewards? It’s important to the benefits of investors.
Aaron Choi: Our platform rewards users for utilizing our products as a way to incentivize users, as well as providing them a share of governance as being a part of our protocol. These rewards are earned when users supply or borrow crypto assets, you can think of this as liquidity mining or DeFi farming. Recently, there was proposed certain changes to these rewards.
Instead of providing users rewards for borrowing USDX, we now will re-allocate those rewards to users that supply USDX into HARD. These users will now earn both KAVA and HARD for doing so. The main reason for thses changes is because our USDX was priced below $1, and it was mainly due to certain incentives that were misaligned with a stable 1:1 ratio to the USD.
Now with the changes, and future changes going forward, we see that the price of USDX has reached 1:1 to USD. This is also a great example of our decentralized governance working well to stablize our platform and provide better services to our users.
And one last thing about our rewards, currently we offer over 110% APY to users that supply USDX to HARD!
Carter: As the first cross-chain liquidity center that’s about to be online, can you tell us the significance of Kava Swap to the Kava platform and HARD application? And how does Kava Swap function?
Aaron Choi: Kava Swap is the AMM that will be built directly on the Kava chain. This will allow the swapping of assets that are currently available on Kava, as well as future assets that get implemented. As a major cross-chain platform, we hope to provide liquidity for users to switch between their assets to other major assets easily and quickly, with low slippage. This will also enable USDX to be traded directly for these assets which also allows users to protect their CDP and HARD vault positions when necessary.
For Kava CDP and HARD, the Kava Swap AMM will be valuable as a source of liquidity and will definitely increase the amount of assets that will be stored on-chain as a result. Currently, users that need to access liquidity will have to go through cross-chain swaps to other chains to access other assets. Kava Swap will allow users to simply access liquidity via the AMM.
Carter: We know that assets security is crucial to users, and I heard about Kava SAFU has launched a new security measures for users’ assets, can you tell me about it?
Aaron Choi: Kava prides itself in providing a secure platform for users to store and utilize their crypto assets. We have an excellent track record in keeping assets safe from hacks, and have never been exposed to hacks, and have never lost our users funds. We want to further increase our security and provide all our users with assurance that their funds are safe when they use Kava.
The SAFU fund will be created via a one-time inflation in the supply of KAVA. 10% of total supply will be minted and held in the Kava SAFU Fund, which will then cover black swan incidents should they so occur in the future. Disbursement and usage will be determined by KAVA holders by governance proposals, and for successful proposals, the amount of KAVA will be sent to the addresses in the proposal immediately after the voting period.
We also set up a quiz game at the end of interview, more than 150 members participated in the quiz game, and 10 winners shared $100 USDC! For more AMA with rewards, come join our telegram group！ https://t.me/TopDaoGroup
