The community originally compared the Kava platform to MakerDAO and its CDP functionality. Many memes floated around on twitter saying “Kava is a cross-chain MakerDAO” or “Kava is MakerDao for Bitcoin”. While being compared to MakerDAO and their success is flattering, it doesn’t really do justice to what Kava actually is. Kava is much more than a cross-chain lending platform.
Just like Jeff Bezos started Amazon with only books, we were fine letting the meme’s run around and position Kava as only a cross-chain lending platform. However, like Amazon, behind the scenes we’ve had a much grander plan for the platform that we’ve been diligently working on.
With the upcoming Kava-4 “Gateway” release scheduled for October 15th, it’s safe to say Kava will have completed its first mission to establish cross-chain DeFi for major assets like BTC, XRP, and BNB. With this step of our journey soon reaching completion, it’s time to unveil the larger vision for the Kava platform and what it means for the Kava community and KAVA holders.
The First Step Was Building the Foundation
The Kava blockchain was designed to serve as a foundation for many open financial services to operate. The Kava-3 release in June of 2020 accomplished Kava’s goal of offering one of the world’s first cross-chain lending platforms while also laying the foundation for much more. It included the following components:
- A decentralized validator set — to provide network security.
- On-chain governance — to manage the lending platform and blockchain parameters.
- A cross-chain bridge — to move cross-chain assets to Kava.
- A CDP module — to hold/escrow assets used as collateral.
- An auction module — to liquidate assets if needed.
- A price feed module — to use price reference data from oracles to inform the system accurately.
Now with Kava-4 “Gateway” scheduled for October 15th, Kava will add new features to the list above:
- Expanded cross-chain functionality — Expanding the number of possible assets available on Kava to BTC, XRP, BUSD, LINK and more.
- The mint/burn module — enabling issuers of new crypto assets, stablecoins, wrapped assets, and others to mint and burn tokens directly on Kava’s platform.
- Optimized bridge technology — On chain rate-limiting and additional performance and security enhancements for assets bridged into Kava.
These elements together create a foundation that makes the next chapter of Kava and it’s evolution possible. Together they create a robust layer 1 platform designed specifically to serve the growing needs of DeFi applications. Importantly, this foundation provides developers with the ability to quickly build applications on Kava’s open decentralized network while being able to leverage its security, cross-chain bridges, and other infrastructure that would otherwise cost millions and take years to develop independently.
Introducing Apps on Kava
Going forward, anyone within the Kava ecosystem can develop their own cross-chain applications easily. All that is needed is to create new modules and submit them for governance approval to be adopted. If approved, they will get deployed with the next Kava mainnet upgrade.
Unlike other open smart contracting platforms like Ethereum or Polkadot, Kava’s DeFi applications are curated by the KAVA holders who govern the blockchain. Whereas other blockchains provide no assurance that their DeFi apps are safe, secure, and of quality, Kava will provide a curated “Apple Store” experience where every application will be thoroughly vetted for quality and safety by Kava’s decentralized community before going live.
This curated approach ensures that the valuable resources of the blockchain are never consumed by crypto kitties transactions, short-lived degen DeFi apps, or other unwanted applications that can congest the network and cause systemic issues.
App Development Going Forward
With Kava’s foundational infrastructure already in place, every app built on Kava will automatically benefit from Kava’s blockchain security, price feeds, and cross-chain functionality. Rapid app development is now possible making the Kava platform poised to have a number of cross-chain DeFi applications deployed in the coming months (not years).
Several applications are already underway and in the near future we will see the world’s first cross-chain money markets, AMMs, and derivatives platforms come to fruition — all thanks to this foundation that is now in place.
With apps bringing more utility and use cases to Kava, the road forward will be valuable to KAVA holders in several ways. Kava’s platform and cross-chain infrastructure provide applications with functionality offered nowhere else and as such, we believe apps that have tokens or fee structures should consider compensating the staked KAVA holders for this security and services in some way. This will align and reward the supporters of the platform and provide a tangible incentive for the Kava governance group to vote in favor of adopting a new application.
- If an app initiates a token distribution they could allocate a percentage of max token supply to KAVA stakers as compensation for providing security and infrastructure for their application.
- If a fee is taken by an app, a small portion of that fee can be paid to KAVA stakers for validating transactions.
- If it’s easily foreseeable that for some applications no extra compensation is necessary. Simply, the existence of the new application will be a public good for the network or synergistic with existing applications.
Development Focus Going Forward
From here the Kava Labs focus and resources will be allocated into two core areas:
- Expanding Infrastructure on Kava. This includes expanding the cross-chain assets available on Kava, further decentralizing the cross-chain bridge process, and improving the Chainlink Oracles and how their data can be accessed by other blockchain platforms and applications.
- New Synergistic Applications. Kava Labs will begin developing new applications for governance approval that expand Kava’s current offerings or are synergistic with them. It is foreseeable that money markets, liquidity provisioning protocols (AMMs), and derivatives products will be highly valuable to the ecosystem.
Kava Ecosystem Grants & Funding
As part of this new chapter, Kava Grants are expanding with enhanced funding and mandates to further drive growth of new applications on the Kava platform. Already created programs will be amplified to further support, advise, and fund new entrepreneurs wishing to build decentralized financial applications.
For more information about Kava grants please see: https://medium.com/kava-labs/kava-grants-ac458a4c1808
Kava is the first decentralized hub for cross-chain DeFi applications and services. Kava’s platform operates like a decentralized bank for digital assets connecting users with products like stablecoins, loans, and interest bearing accounts so that they can do more and earn with their digital assets.
Stay in touch!
- Follow us on Twitter: https://twitter.com/kava_labs
- Join the conversation on Telegram: https://t.me/kavalabs
- Checkout our code: https://github.com/kava-labs
Disclaimer: This content is provided for informational purposes only, and should not be relied upon as legal, business, investment, or tax advice. You should consult your own advisers as to those matters. References to any securities or digital assets are for illustrative purposes only, and do not constitute an investment recommendation or offer to provide investment advisory services. Furthermore, this content is not directed at nor intended for use by any investors or prospective investors, and may not under any circumstances be relied upon when making investment decisions.