Kava Token Economics

Scott Stuart
Aug 16, 2019 · 4 min read

The Kava blockchain is the first cross-blockchain DeFi platform enabling users to leverage and hedge using a multi-collateral CDP system and collateral-backed stablecoin (USDX). The native token of the Kava blockchain is KAVA, a governance and validation token that is staked by validators, who vote on blocks and participate in governance.

Transaction Fees

Deflationary Fee Structure

Example

Inflationary KAVA

Block Rewards

The target rate of inflation for KAVA is designed as an incentive for ⅔ of the total KAVA supply to be staked. At launch the target rate is 7%. If less KAVA are staked, KAVA supply via block rewards increases up to a ceiling of 20% annualized inflation of the total supply. If more than ⅔ are being staked, KAVA block rewards decrease gradually down to a floor of 3% annualized inflation.

Lender of Last Resort

Commission Rates

The default mode is a single commission rate for Kava block rewards, as well as transaction fees. However, if the community chooses to change this setting later for variable commission rates per fee token, the community can do so through governance. This would allow validators to charge a variable commission rate on block rewards paid in KAVA, USDX, and on transaction fees from other whitelisted tokens/pegged assets such as pXRP.

Example

Governance

Example

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.

Kava Labs Blog

This publication features news and articles from the Kava…

Kava Labs Blog

This publication features news and articles from the Kava Labs team. Kava Labs is a developer of the Kava blockchain, the first cross-blockchain DeFi platform.

Scott Stuart

Written by

Work on Product at Kava Labs Inc.

Kava Labs Blog

This publication features news and articles from the Kava Labs team. Kava Labs is a developer of the Kava blockchain, the first cross-blockchain DeFi platform.

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