Kava (KAVA)

Basics

• Started in:
• Based in:
• A cross-blockchain DeFi platform built on Cosmos, enabling leverage and hedging using a multi-collateral CDP system and collateral-backed stablecoin (USDX).
• Kava is live on a Cosmos Zone testnet. Kava allows to turn any asset supported by Cosmos, particularly those from chains that don't support smart contracts, into potential collateral to be used for decentralized leverage/hedging purposes (by minting a stablecoin a la DAI). It's interesting as thanks to interoperability it effectively can support multi-collateral right out of the gate, starting with XRP. Now whether XRP holders would actually be interested in something like this is a different question... (Ripple backs Kava however, so that is probably why).
• Kava 9 mainnet went live (20-1-2022).
• From the Chorus One (which provides staking on Kava) website (1-3-2020):

"Kava is bringing collateralized debt positions (CDPs) to the Cosmos interchain ecosystem. With the Kava platform users are able to borrow a USD-pegged stablecoin (USDX) against their crypto collateral. Kava CDP functionality will support ATOM, BTC, BNB and XRP when it launches in Q1 2020."

Audits & Exploits

• Bug bounty program can be found [insert here].
• Kava Swap completed a CertiK audit (28-8-2021).

Bugs/Exploits

• On May 11, 2022 Kava lost half of its value after its hardcoded UST price was used to generate lost of bad debt.
• Not long after their upgrade to Kava 5 it ran into issues. From Figment Weekly Digest (11-3-2021):

"Kava halted their chain, Kava 5, on March 5th, when they discovered a rewards distribution bug. The issue originated from a last-minute change to the accounting logic for HARD protocol liquidations. This change led to inaccurate reward calculations for HARD Protocol liquidity provision rewards. The team discounted the blocks, and restarted the old chain under Kava 6. They have since released plans to restart the Kava 5 upgrade as Kava 5.1"

• The bug led the Kava Safety Committee to halt and roll back the network (4-3-2021). The network had been offline for 15 hours according to Messari (31-3-2021).

Governance

Admin Keys

• Has a Kava Safety Committee which can roll back the chain. This creates questions around it's decentralization.

DAO

• Has had 65 proposals, out of which only 8 got rejected (15-10-2021).

Treasury

• The Kava DAO voted to allocate $750M to on-chain developer incentives (4-3-2022).
• Has a 10M community pool (15-10-2021).
• Started a "$185M Ignition Fund" to onboard DeFi projects (22-9-2021).

Token

Token Distribution

• Has 20% inflation (15-10-2021).

Stablecoin

• USDX

Coin Distribution

• From Decrypt (22-4-2020):

"Framework Ventures invested $750,000 in Kava network [which translates to 4% of the tokensupply]. Framework took no equity. Instead, it will exert its influence by staking tokens."

• Kraken holds 16% of all voting power, with Binance Staking holding 12%. According to the BigDipper block explorer, 3 validators together have 28% of the voting power, and 20% of the validators holds 88% (15-10-2021).

Tech

• Whitepaper can be found [insert here].
• Code can be viewed here.
• Built on: Tendermint
• Programming language used:

Transaction Details

• Capacity (TPS):
• Latency:

How it works

• From this article (28-5-2020):

"KAVA Labs is the very first DeFi platform to have been built on the Cosmos Ecosystem. The network is developed to fill out the need for four different issues. Firstly, becoming the first-ever dedicated DeFi platform to offer multi-collateralized loans and stable coins for significant digital assets.

Secondly, the network aims to serve the blockchain community by offering decentralized leverage and stability to its users. Their third goal, being the first to market, was obtained upon launch of KAVA’s Mainnet. Finally, their fourth goal is to become the number one DeFi application.

The latest KAVA project is in collaboration with Chainlink Oracles. They have onboarded Chainlink’s reference price oracles onto their blockchain. With this collaboration, Kava makes it possible for any Cosmos Hub to obtain a variety of DeFi data. Useful data set examples to include prices for fiat currency, commodities, and cryptocurrencies. See here for more information."

Is built around three core products, Mint, Lend and Swap (15-10-2021).

Upgrades

• Kava 9 mainnet went live (20-1-2022). This update introduced IBC.

• From CoinDesk (9-4-2021):

“This [Kava 5] upgrade will finalize the transition of Kava as a single application blockchain to an industry-leading DeFi platform complete with interoperable cross-chain tooling, secure price feeds and enterprise-grade reliability that financial institutions can trust,” Kava Labs CEO Brian Kerr told CoinDesk. Additionally, Kerr told CoinDesk the upgrade will also complete the Hard protocol, the first cross-chain money market built on Kava’s platform that offers lending, borrowing and yield on cryptocurrencies such as bitcoin, XRP and BNB.

The upgrade is aimed squarely at institutional investors and corporate treasuries, according to documents shared with CoinDesk, touting the ability for firms to get 25% APY on their bitcoin without counterparty risk. While the risk of traditional players not fulfilling their lending obligations is obviated, it should be noted that smart-contract risk and other factors certainly remain in play."

• From their twitter (21-1-2021):

"The most significant & complex Elrond mainnet upgrade has been released. The tools for embedding native money into the internet are here. Smart Contract deployment, Meta-Transactions, a new Arwen WASM VM & several other features have been deployed."

Staking

Validator Stats

• Its main validators are Kraken, Binance, Sikka, Stake.fish, Chorus One and HuobiPool. There are 100 out of 155 validators live and 57.80% of KAVA is bonded (15-10-2021).

Interoperability

• From Figment (4-2022):

"Kava recently announced an integration with Connext Network. This integration will bring $37M+ in cross-chain liquidity to Kava with their trustless bridge, with deployment onto the Kava Ethereum Co-Chain coming in the future."

• From Crypto Briefing (11-9-2020):

"Rather than tapping into Ethereum, Kava has avoided the leading smart contract platform thus far. Instead, Kava is integrating assets like BTC, BNB, and XRP. These are assets whose holders may desire non-custodial loans but have no way to access such a service."

Oracle Method

• Chainlink is being used (26-3-2020).

Roadmap

• Can be found here (9-1-2021).

Usage

• From their blog (22-9-2021):

"With three protocols, $2.1 billion in assets on-chain, over 280k users, and $1.8 billion in cross-chain transactions and counting."

Projects that use or built on it

• HARD Protocol; cross-chain money-market application built on (23-11-2020) Kava.

Pros and Cons

Pros

• From Hackernoon (16-1-2021):

1. "Generous support for cross-chain assets.
2. Provides a yield earning option where USDX stablecoins are minted and contributed to a Hard protocol.
3. Provides Masternodes and staking opportunities and offers excellent rewards for top 100 validators.
4. Autonomous system for burning coins to regulate supply thus increase demand and leave the currency deflationary."

Cons

• Has a Kava Safety Committee which can roll back the chain. This creates questions around it's decentralization.
• Kava voting power is highly concentrated among the top validators (15-10-2021). See coin distribution above for more info.
• Has 20% yearly inflation.

Team, investors, Partners

Team

• Brian Kerr; CEO
• Ripple backed (23-3-2020).
• Is integrating Band in their cross-chain defi.
• Fedrico Kullmer; ex-member, Fedrico joined Tendermint as an Intern in 2018. He later was promoted to software developer. He left Tendermint in 2020. He later worked at Kava Labs, Chainsafe and Interchain Foundation.

Funding

• Started a "$185M Ignition Fund" to onboard DeFi projects (22-9-2021).

Partners 

• Partnered with Chainlink (26-3-2020).
• Kava announced (26-8-2020) the strategic cooperation with Injective Labs, creators of Injective Protocol. 
• Partnered with Mantra DAO (4-10-2020). 

• Partnered with Reef Finance (23-11-2020):

"The cooperation will bring Kava’s collateralized loans, USDX stablecoins, HARD Protocol and other highly attractive yield opportunities to Reef users."

(:

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