Decentralized finance (DeFi) is THE key subject of the blockchain and crypto ecosystem. After Ethereum and Tron, it's Cosmos' turn to launch Kava, its collateralized stablecoin based on the same concept as MakerDAO.
The birth of Kava
Announced in June 2019, the Kava project has just been deployed on the mainnet of the Cosmos network.
Kava is a protocol operating on the same principle as MakerDAO. It allows users to borrow USDX stablecoin against sealing more crypto assets.
At the time of launch, the platform accepts only crypto made in Binance, BNB, as collateral. Indeed, the Kava project was incubated by the Binance Launchpad, which probably weighed in the decision to only accept the BNB at launch.
This news seems to delight Changpeng Zhao (CZ), CEO and founder of Binance:
“We are delighted that BNB users can now access DeFi products thanks to the Kava loan platform. By accepting BNB as collateral on its lending platform, Kava is creating another use case for BNB, which adds value to BNB users, "he said.
In addition to the USDX stablecoin, the Kava network works thanks to a second token of the same name: KAVA. This token, based on the same concept as the MakerDAO MKR or the Compound COMP, will allow users to take part in the Kava governance process.
This launch also begins the distribution of 3.848 million KAVA to participants who have created USDX through the platform. So every week for the next 52 weeks, the creators of USDX will share 74,000 KAVA.
Cosmos, the interoperable blockchain
This project fits perfectly into the Cosmos credo. Indeed, Cosmos is a blockchain which aims to facilitate interoperability between the different blockchains, as Polkadot can do.
Kava fits perfectly into this dynamic. Indeed, Kava will probably allow holders, whatever the token, to benefit from the advantages of the DeFi ecosystem on the Cosmos blockchain in the future.
However, for the moment, the functionality offered by the DeFi ecosystem of Cosmos is still much less compared to that of Ethereum. Indeed, Ethereum benefits from a large number of projects, which makes them composable with one another.
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