3 SEP 2019/

Kava - The first decentralized lending platform in Cosmos

We live in a world of finance. Monetary incentives and market movements influence our daily decisions and define human lives in general. Under capitalism, the financial industry has become global expressing economic relations between people and institutions. Nowadays, existing wealth distribution mechanisms are inefficient and the economic environment is unstable. A lack of trust become inevitable and we are moving into the new era of decentralized finance (DeFi). Borderless, accessible and transparent interactions between participants without counterparties to transform old and inefficient financial instruments is the new paradigm of the trustless economy.

Picturee Cosmos DeFi + BTC, XRP, ETH -> Kava - K, USDX

Kava is the first decentralized bank in the Cosmos ecosystem bridging broad digital assets to DeFi. With interoperability in mind and solid team cross-chain expertise Kava blockchain will bring new markets to the Cosmos ecosystem providing users with the liquidity and the necessary fundamentals for DeFi applications and services.

4 "De-s" of Kava

1) De-centralized lending solution. Any person can take a loan in a stablecoin collateralized with crypto assets. There is no third party involved and each person is self-responsible for managing debt and lends to himself. This allows people to release a portion of stacked liquidity from passively held digital assets and spend it on whatever they want.

2) De-centralized margin trading. When users put crypto collateral to take a loan they can use it for doubling-down their long position in a particular asset. In this case, if the collateral value of the asset increases the user may get a higher profit.

3) De-centralized stablecoin. Kava platform provides a mechanism to issue a stable digital currency through collateralized debt position (CDP). Stable digital currency maintains 1:1 peg to USD playing role of a hedge against a bear market or a true mean of exchange without explicit volatility. It allows decentralized stablecoin to take part in broader financial applications like decentralized exchanges and financial marketplaces, creating a wide space for DeFi development.

4) De-centralized governance and ownership. The most exciting part is that everyone can participate in the project's evolution and own a share of the network. All participants who stake native token KAVA will be rewarded for effective governance depending on transaction fees, total supply emission and repaid loan fees.

Cosmos ecosystem is designed with existing assets like BTC or XRP in mind. If we assume that just 1% of BTC will take part in DeFi it will result in more than 1,5 billion USD value injection also adding to a scarcity of BTC positively influencing the cryptocurrency market in general.


In the next chapters we will dive deeper into details of Kava platform and cover staking benefits, CDP, existing risks associated with staking and other important topics.


P2P Validator offers high-quality staking facilities and provides up to date information for educational purposes. Stay tuned for updates and new blog posts.

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Alexey Bondar

Research & analysis at P2P Validator

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