On 29th of May Kava conducted an AMA in Satoshi Club Telegram Group. Our guest was Aaron Choi(The VP of Global Business Development at Kava). Prize Pool was $200. We got over 200 questions posted on our website and about 800 questions during the Live Telegram Chat. Interest about Kava was really impresive from our Community. Let’s take a look of the most interesting points from the AMA with Kava.
Part 1 — introduction and questions collected on our platform
Irina Kravchuk | Satoshi Club: Hi everyone. Welcome Aaron Choi
Aaron Choi | Kava: Hey guys!!! Super excited to be here!
Irina Kravchuk | Satoshi Club: Same here
Ciprian Ciubotaru | Satoshi Club: Hello
Aaron Choi | Kava: I guess i’ll do an intro about myself first?
Irina Kravchuk | Satoshi Club: Our AMA will be like a good wine, the longer it takes before you drink it — the better
Aaron Choi | Kava: Haha that sounds like a tasty AMA
Irina Kravchuk | Satoshi Club: Please tell us a bit about yourself?
And how did you come to be involved in Kava Project
Aaron Choi | Kava: Hey guys, I’m aaron, Im the VP of Global Business Development at Kava. I used to run a small exchange called GJ.com. And before that I was VP International Exchange at BTCC.
Irina Kravchuk | Satoshi Club: What did you do before crypto?
Aaron Choi | Kava: I joined the Kava team in Oct before we did our BInance launchpad. I had met Brian in Shanghai in sept for a conference. I had been following Kava for some time and thought it was a great project. Brian also thought my experiences was quite critical so it was a good match. I joined shortly after!
Before crypto, I was in digital advertising and gaming.
Serg | Satoshi Club: Hi Aaron :) I was late a few minutes
Aaron Choi | Kava: All those pop up ads in your mobile games. might have been because of me. Hahaha
Irina Kravchuk | Satoshi Club: Gaming as a business or as a hobby?
Aaron Choi | Kava: Business mostly. I worked with game devs
and helped them make money with advertising in their apps. Of course i play games myself. Mostly mobile based Lol/Dota type moba’s.
Irina Kravchuk | Satoshi Club: Nice. I hear it’s a very creative field. What’s more interesting — gaming industry or blockchain/ crypto?
Serg | Satoshi Club: Is your current role at Kava very different from what you did before?
Aaron Choi | Kava: I love blockchain way more. I’ve been personally in bitcoin since 2012
Irina Kravchuk | Satoshi Club: Pretty fast
Aaron Choi | Kava: I think what i did before helped for what I do now. I’ve always been on the sales/bd/marketing side of industry. It’s just that i’ve been involved in a lot of different industries now
Irina Kravchuk | Satoshi Club: You must have loaded up at a good price :grinning:
Aaron Choi | Kava: From social apps/media to gaming to advertising and now to crypto. Those were the good times for sure. Bitcoin under 100 not for very long tho haha
Irina Kravchuk | Satoshi Club:
Ok, thanks for the introduction Aaron. For the first part we have questions from the community.
Q1 from @dani_unss
What’s the way the collateral deposit and lending works for me to gain from minting USDX?
Aaron Choi | Kava: So first off, to let everyone know. When we launch our CDP product, we will be doing a promotion to increase your rewards from minting USDX. These rewards will be in KAVA.
In order to use our CDP and mint USDX, you would use any of the wallets that support these features, these include, (but not limited to), frontier wallet, cosmostation, trust wallet.
Within the wallets, you’ll be able to take your BNB and collateralize it into a Kava CDP. From there, you will be able to mint an amount of USDX, which will be yours to use. Minting USDX will qualify you for those KAVA rewards.
Serg | Satoshi Club: So, if users hodl BNB on Binance, thay are not able to participate, right?
Aaron Choi | Kava: We are working with Binance to integrate these features quickly. I don’t have exact timelines here, but our teams are working hard to make these happen soon.
Serg | Satoshi Club: That would be great, because I hodl my BNB for tickets on Binance.
Aaron Choi | Kava: Yes definitely. We understand that as well. And we want users to be able to benefit from all the values of BNB as well as Kava CDP and USDX.
Serg | Satoshi Club: Do you have any approximation about the reards?
Aaron Choi | Kava: We estimate around 20–30% on BNB but subject to variablity of course. Here is a medium for some estimates on BNB staking returns across the different options: https://medium.com/kava-labs/just-how-much-yield-does-binance-com-offer-you-for-being-a-bnb-holder-fd1293010146
Irina Kravchuk | Satoshi Club: And lending would use the same principles, correct?
Aaron Choi | Kava: Yes correct here
Irina Kravchuk | Satoshi Club: Got it. Thanks.
Q2 from @alitan900
Token treasury 28.48% — how are these tokens used and where are they sent? Why should I use Kava loans if you can use margin trading on many top exchanges? Credit platforms are just a small part of the DeFi ecosystem. Are you planning an extension of functionality such as derivatives or dex?
Aaron Choi | Kava: Token treasury is the amount of tokens held by the foundation. These are used to provide for Grants and funding of different projects on the Kava Blockchain and different integrations. These funds are also used for marketing and other campaigns from time to time. Also they will be used to grow out the Kava ecosystem in the future.
You should use Kava if you want to use a loan from a non-centralized entity. The risk profile of a centralized exchange and a decentralized platform is a little bit different. As well, our platform will at least provide one more option for price competition on loan APR. Credit platforms are a critical layer to DeFi. We firmly believe that a lot of other products and features can be built on top of Kava. We have some ideas about derivative products that we’d like to see happen using KAVA and USDX, but we’ll see if we develop these in house or if an outside team does.
Serg | Satoshi Club: Who chooses the projects for granting/funding?
Aaron Choi | Kava: Currently our team decides the funding for grants but we do want to eventually move this to all our governance to have a say in the funding.
Irina Kravchuk | Satoshi Club: How can projects qualify for grants?
Aaron Choi | Kava: They can contact me or members of our team for more information!
Irina Kravchuk | Satoshi Club: +1
Serg | Satoshi Club: It’s classified.
Irina Kravchuk | Satoshi Club: He’ll have to kill you if he gives you this info :grinning:
Serg | Satoshi Club: I’ll change my passport/name
Irina Kravchuk | Satoshi Club: And with this flights delays, it’s a lot of trouble
Aaron Choi | Kava: Haha we do have a medium post about grants and we have had a lot of interest since then. If anyone has proposals, can also contact me about them as well.
Q3 from @Odino7
KAVA does cross-chain support. Compared to other DeFi platforms, KAVA offers collateralized loans and stable coins to users too. How will volatility be managed there with so many different collateral systems in CDP?
Aaron Choi | Kava: Every cdp opened by a user is managed independently of all other cdps out there. Each CDP has a specific asset type, as well as corresponding collateralization and margin funding %s that act as limits and triggers for liquidation. The system is automatically set to trigger liquidation once certain criteria are met. This reduces the risk to USDX.
Each asset type could have different settings. ie. BNB collateralization might be set at 300% and margin funding level might be 150%, while ATOM might be at 400% and margin at 200%. These are just examples
These settings will depend on the assets volatility. Also there have been proposals to set up security committees that have deeper governance on these settings. The members of these committees have the responsibility to make sure that these settings reflect the security of the CDPs.
Also, supporting many different types of assets, we believe could result in a much more stable USDX, as the underlying value will be tied to multiple types of assets instead of just 1.
Serg | Satoshi Club: What about security? Have you studied the breaches which happened with other DeFi projects lately?
Aaron Choi | Kava: Oh yes definitely. There have been a lot of security issues recently particularly on the ethereum side of things.
We have been working with multiple auditors for the code that we produce.
Serg | Satoshi Club: Does it mean that the fault was in the ETH blockchain?
Aaron Choi | Kava: No it’s certainly not Eth itself that is insecure. It has to do with the smart contracts themselves, AND most importantly, how smart contracts interact with other smartcontracts.
Different implementations of smart contracts might work on different assumptions which might not be consistent over all contracts.
Irina Kravchuk | SatoshiClub: The smartcontracts weren’t that smart 🤓
Aaron Choi | Kava: Very nuanced and complex things, that a lot of developers might miss. Hahaha definitely dumb smart contracts.
I mean they work as coded. Just maybe they were coded not great.
for example here is a blog post by certik about kava’s audit
https://certik.io/blog/clients-&-partners/kava-comprehensive-audit-for-the-validator-vesting-smart-contracts/ . We definitely take security super seriously. There is a lot of money at stake in DeFi and we don’t ever want to expose our users funds to any additional and preventable risks.
Irina Kravchuk | SatoshiClub: That’s good attitude :+1:
Aaron Choi | Kava: We also know that DeFi is very young, and mistakes are bound to be made at any level. We need proper procedures as well as help from everyone within the security community to root out all potential issues.
Serg | Satoshi Club: Do you have a reserve fund for possible issues?
Aaron Choi | Kava: We don’t have a dedicated reserve fund at the moment. Perhaps this will happen via governance voting in the future to set aside some funds for this.
Q4 from @green00098
Does KAVA have any Coin Burn / BuyBack system or any plan for Token Burn to increase the value of Token & attract Investors towards Stake to invest?
Aaron Choi | Kava: We don’t have a dedicated plan for regular coinburn (ie binance buyback and burn — we don’t do that)
We have done buybacks in the past. And when we do, we are very transparent about them. The last one we did was shortly after our IEO. I believe it was around Nov 20 2019 when we did that announcement
Our Kava ecosystem does burn Kava away from the ecosystem tho during its usage. After users close out a CDP, KAVA is paid to do so, and then that KAVA is burnt.
Serg | Satoshi Club: Thank you.
Q5 from @sadikknail
Why does Kava need to create its own stable coin, while there are many other options available in the market?
Aaron Choi | Kava: Kava needed to create our own stablecoin USDX, built on the Kava blockchain, because we absolutely needed to be able to tie the supply of USDX to the value of assets inside Kava’s CDP. If we used another stablecoin, it would have been quite difficult to seperate out the kava product-related stablecoin “market cap” from the total stablecoin market cap and then compare that to Kava’s CDP asset ratios.
Building our own stablecoin makes it easier for everyone to transparently check the values and make their own assesments about the safety of our stablecoin.
Irina Kravchuk | Satoshi Club: That makes sense.
Aaron Choi | Kava: Also the risk of using some other stablecoin is potentially high. AND last point:
The way we built our USDX, is believe super innovative. We have baked in a savings rate into the stablecoin. Just by holding USDX will generate USDX as savings.
Serg | Satoshi Club: It’s like depositing money in a bank :)
Aaron Choi | Kava: The savings rate comes from the loan APRs paid by borrowers and in this way, it makes it super easy for USDX holders to get those rewards. Exactly. USDX is modern money.
Irina Kravchuk | Satoshi Club: How much is the rate?
Aaron Choi | Kava: Currently I don’t know where we’ll start at, because we haven’t launched. I believe at launch loan rate might be around 5% APR (but don’t quote me on that) and USDX APR might be a bit lower than that but not by a crazy amount lower.
I believe that advantages of holding USDX will be orders of magnitude higher than other stablecoins.
Other stablecoins require 2ndary services to provide the savings rates. which increase costs and also potentially introduce more risks.
Serg | Satoshi Club: Thanks Aaron for your great answers
PART 2, TELEGRAM COMMUNITY QUESTIONS
Telegram User:
Whats the core architecture of Kava Blockchain and which types of modules are there in Kava Platform ?
Aaron Choi | Kava: We built Kava using the Cosmos SDK, so the main architecture really follows Cosmos and ATOM (for the token and staking side). We have added additional modules such as CDP, Auction, Liquidations, Data feeds, Link Oracle software for Node operators, Bridges for BNB and other assets, and many more. We’ll be building more and more bridges to many other assets soon after BNB too.
Telegram User:
Can you give me the best features about Kava to convince me and other investors to invest in Kava in long-term?
Aaron Choi | Kava: Sure, first off, Kava has an amazing team full of dedicated professions that want to change the financial world. The types of backgrounds of each of the teammates is incredible. I love working with my team.
Kava’s blockchain architecture, basing it off of Cosmos, makes it a super secure chain with fast finality. Every transaction is finalized within seconds. This makes transfering value with USDX extremely fast and secure.
And as I stated before, USDX is modern money. A stablecoin with a built-in savings rate is revolutionary. Your USDX will grow in value as the network is growing in value. This reduces costs as a lot of the middlemen platforms are removed in order to capture that value.
Telegram User:
Which 3 partnerships are you most proud of? How are these partnerships useful in KAVA infrastructure?
Aaron Choi | Kava: Our partnership with Binance is huge. They have an enormous number of users which is great for us in terms of marketing and exposure. As a top exchange, they’ve aligned very closely with the crypto ideals which we are also very closely aligned with. Things such as decentralizing certain features away from exchanges and allowing for those technologies to proliferate. So we’re excited to be able to get BNB users on board Kava.
Our partnership with OKChain that we just announced is also pretty big for us. OK runs a similarly large centralized exchange in asia and has a sizeable userbase as well. Their OKChain is their decentralized chain strategy that will give rise to a DEX as well as other services on their chain. We believe that a cefi/defi hybrid strategy is a good stepping stone to helping DeFi grow quicker in the future so we’re looking forward to doing big things here.
And our partnership with Chainlink is also very important to us. Being the first DeFi project on Cosmos, partnering with LINK gives us an advantage to be able to provide the Cosmos ecosystem with LINKs oracle solution. They have a strong network of data providers and node operators and so do we, so we’re looking to a strong partnership in which we can grow our ecosystems collaboratively.
Telegram User:
What types of DApps does $KAVA want to build and focus on developing? What are the advantages does $KAVA gives and provide for DApps developers?
Aaron Choi | Kava: KAVA wants to focus on building financial products and software for crypto traders and users. Our first product, being the CDP is highly geared towards more sophisticated users, probably not for noobies in the crypto space unfortunately. There is some risk involved with these product so they do require some understanding.
That being said, I believe further products might involve derivative products based on USDX. These will allow traders to trustlessly execute trades that before they could only do on centralized exchanges. The main goals is that we don’t want to compete against centralized exchanges here. We want to provide these tools for exchanges to build up their decentralized strategies. We believe that the future will see more users go towards decentralized products as the risk profiles will be lower, and fees cheaper.
Also would love for our ecosystem to grow and have other developers build the services and products on USDX. We do provide developer tools to interact with our blockchain, accessible via our github.
https://github.com/Kava-Labs
Telegram User:
Are you concerned about the innovations that ethereum is making towards Eth 2.0? that Kava has to remain the most reliable option for DeFis?
Aaron Choi | Kava: Actually, i’m super interested in the steps that eth is making towards 2.0. I’m a supporter of Eth as they were the first blockchain that was able to make DeFi a reality. And the reality of the situation is that ETH is still the largest ecosystem for DeFi products anywhere.
I think ETH 2.0 is very groundbreaking but as a project on ETH, i would be worried about how the change to pos would affect my project. The velocity of eth tokens could totally change and those changes are extremely hard to predict.
I think that because Kava has chose to build its own chain, we don’t have to worry about those issues. Kava’s security and consensus is a Kava community issue and not reliant on another blockchain.
With ETH, all the projects are piggybacking on ETH’s consensus and security. The gas wars that inflate fees is just part of the issues that happen in that ecosystem.
I think our system will have some competitive edge against ETH’s protocol. Of course if we scale to even close to ETH size, we might see some different problem sets that the current ones we have. But those would be good problems to have.
Part 3 — Conclusion and quiz results
Serg | Satoshi Club: Thanks Aaron! The AMA was great. Thanks for taking the time to be with us today.
Aaron Choi | Kava: No problem and love being here!
Serg | Satoshi Club: Do you want to address the community before we open the chat?
Aaron Choi | Kava: Yes i have a few words!
We’ve publicly announced that our CDP will be launching on June 10th. Looking forward to having everyone participate in minting USDX and receiving those extra juicy KAVA rewards for early minters. We’ve set aside an incredible amount of KAVA for this launch so really looking forward to everyone experiencing Kava’s DeFi solution as well as USDX.
You can check our medium for more up to date info. All the stats about rewards for USDX minting and BNB staking are all in there as well.
https://medium.com/kava-labs
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