KAVA Reward Updates
Learn how USDX Minting Rewards Are Changing
Update: Kava Labs launched a rebranded product portfolio in late August 2021, and the following archived article contains outdated information. Application rebrands on the Kava Platform are as follows: Kava CDP is now Kava Mint; Hard is now Kava Lend; Swap is now Kava Swap. To learn more about the rebrand, please read the announcement.
Kava 5 and Hard V2 successfully launched on April 8th, 2021, and more changes are coming! Over the next several weeks, governance proposals will be made to adopt incremental changes to how rewards are distributed in order to achieve improved USDX price stability. KAVA rewards will be gradually shifted away from minting USDX on Kava to supplying USDX to Hard Protocol, and other Kava DeFi applications.
The stability of USDX around $1 is very important for all Kava stakeholders. In the past, attempts have been made to achieve this through reducing rewards to incentivize users to hold long positions on USDX. The following series of adjustments on how users earn KAVA rewards are being proposed because we believe this change will not only increase price stability for USDX, but will increase the amount of rewards users will receive.
Here is the plan of action to achieve this:
1. On testnet a Kava governance proposal will be enacted where KAVA rewards are only given for supplying USDX to Hard, rather than only minting USDX in Kava.
2. The first governance vote will be to add a smaller amount KAVA rewards for supplying USDX to HARD. This step will act as a further test to be sure that the system continues to operate as expected. This will also give users a chance to become aware of the new procedure so they don’t miss out on potential rewards.
3. The second vote will be to reduce existing USDX minting rewards by 50% and add the equivalent amount of rewards to supplying USDX to Hard Money Market.
4. The third step will be to reduce USDX minting rewards to 0% and add that amount to supplying USDX to Hard (the same functionality as the testnet).
Since voting on governance proposals is open for one week, this entire process is anticipated to take approximately one month. If you have KAVA staked to a validator, please exercise your duty to vote on governance. Click here to view governance proposals.
At Kava Labs, security is always the top priority which is why updates, new features, and changes are incrementally rolled out. By taking these efforts to increase the stability of USDX, we will collectively be enhancing the usage of USDX on the Kava platform. This will be beneficial for all as we continue to expand what the Kava ecosystem offers users. Check out what else is on the roadmap for the near future!
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