KAVA is the native token of Kava.
Kava is a DeFi lending platform designed to allow users to earn high returns on its cryptocurrency by lending it out and using it as collateral for stablecoin loans. Kava’s native stablecoin is USDX.
|Circulating supply (approximately, as of August 2020)||27,000,000|
|Purpose||Governance, collateral, validator staking|
How does Kava work?
Kava’s purpose is to allow people to lock up cryptocurrency as collateral, similar to other Ethereum-based DeFi projects. One of its key differentiators, however, is that it leverages the interoperability features of the Cosmos network to allow a wide range of cryptocurrencies to be more easily used as collateral.
In a nutshell, the cryptocurrency deposited into Kava collectively becomes the collateral for USDX stablecoins, which are pegged to US$1. The network is over-collateralized, giving people assurance that the USDX stablecoin can always be safely redeemed for $1 of value.
There are two basic things a user can do with Kava:
- Lock crypto collateral in a smart contract to withdraw USDX
- Stake (lend) USDX to earn interest
These can be combined, though, and can interact with other DeFi projects to be greater than the sum of their parts. For example, someone could take on a leveraged position by taking out a USDX loan and then using that to buy even more cryptocurrency.
What does the KAVA token do?
The KAVA token serves three purposes:
- Governance. KAVA token holders can exercise governance rights on the Kava platform.
- Lender of last resort. If all else fails, KAVA can start being liquidated to help guarantee successful USDX redemption.
- Validator staking. The top 100 validator nodes on Kava’s network can earn staking rewards in KAVA.
How to buy KAVA
Here’s a step-by-step guide for one way of buying KAVA. Note that there might be other options available, so you may want to compare cryptocurrency exchanges to find the one that’s right for you.
More guides on Finder
How to buy Cardano (ADA) in Canada
Cardano (ADA) is an entirely new cryptocurrency network built from scratch. See what makes it unique, and where you can buy it.
Best Portfolio Trackers of 2021
Crypto portfolio trackers are a must to stay on top of your crypto investments. Here’s our list of the standout trackers to consider with pros and cons for each.
Dogecoin (DOGE) price prediction 2021
Where is the price of Dogecoin headed in 2021 and beyond, and what are the factors affecting the value of this iconic cryptocurrency?
Review: Celsius Network cryptocurrency lending and borrowing platform
An in-depth review of one of the most popular lending and interest earning platforms in cryptocurrency.
Nexo review: Is it safe for high interest returns?
Nexo is a cryptocurrency lending and borrowing platform that offers high interest rates on cryptocurrencies, stablecoins and fiat. We review the features available and look at how safe your funds would be on the platform.
Ethereum (ETH) price prediction 2021
What affects the value of Ethereum (ETH) and how might the price of ETH fluctuate in the year ahead? Find out in this comprehensive guide.
AscendEX (BitMax) Cryptocurrency Exchange Review
A complete review of the AscendEX exchange, covering trading and DeFi features, associated fees, regulation and security. Is AscendEX right for you?
Axie Infinity guide: How to play and earn
Axie Infinity is an RPG game that is currently dominating the NFT sector. Discover what Axies are, what makes them unique and how you can earn money simply by playing.
What is Compound Finance?
We explore how to use Compound Finance for lending and borrowing.
What is margin trading?
Learn more about margin trading and decide whether this is a suitable investment strategy for you.
Ask an Expert
You must be logged in to post a comment.