Kava.io is a software protocol which enables the borrowing and lending of multiple cryptocurrencies. It is one of the popular decentralized finance projects in the market. Kava.io enables lending and borrowing by eliminating the need of intermediaries in the market. This concept alone has what has helped DeFi become one of the best performing sectors in the blockchain space as financial intermediaries are costly and often times inefficient. The whole offering of the blockchain technology is to empower users – which Kava.io aims to do by giving them a safe way to grow their cryptocurrencies.
What is Kava.io?
Kava is a cross-chain DeFi lending and borrowing platform. Users can borrow USDX stablecoins by depositing a variety of cryptocurrencies to earn a stable return. While Ethereum is known as the DeFi hub and it has its own reasons for being so, Ethereum’s network may not always be the ideal option. The queen of the cryptocurrencies suffers from problems of scalability and the bull run of 2021 made it clear that Ethereum is not set for mass-scale adoption. This gives Kava.io an added advantage because instead of Ethereum, it is based on the blockchain of Cosmos.
Users utilize the smart contract technology by locking up cryptocurrencies on Cosmos’ blockchain to take out loans in USDX stablecoin which has its value pegged to the US Dollar. Loans are taken out through collateralized debt positions (CDP) which ensures overcollateralization in the case the price of an asset falls. The collateralization of cryptocurrencies to mint USDX earns users rewards in KAVA – the native token of Kava.io.
Future outlook
Kava.io sets itself apart from other DeFi lending protocols by its support for cross-chain assets. It also utilizes Cosmos’ interesting zones technology to enable deposit of assets like Bitcoin, Ripple, Binance Coin and Binance USD; however, for now cross-chain assets have to be wrapped as BEP2 assets for now. When the zones technology is deployed and the cross-chain compatibility is fully activated, Kava coin is expected to boost significantly.
At the time of writing, Kava.io token stands at a price level of $6.26. The price of the cryptocurrency has been consolidating in the recent timeframes; hence, an upward break out may be soon expected. According to the estimates of Wallet Investor, Kava will be operating at a price level of $10.06 in a year’s time and reach towards $25.29 in five years’ time. Digital Coin Price projects a similar trajectory for the cryptocurrency. Kava is expected to end the year with a price level of $9.36 and reach towards $22.2 by 2026.
