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-collateralised, 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
What is Uniswap?
Learn more about the UNI cryptocurrency in this beginner’s and buyer’s guide.
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.
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.
How to buy Polkadot (DOT)
Learn more about the DOT cryptocurrency in this beginner’s and buyer’s guide.
Review: Atomic Wallet
Learn how the Atomic Wallet lets you perform cryptocurrency atomic swaps and keep your crypto safe.
What is Compound Finance?
We explore how to use Compound Finance for lending and borrowing.
Metamask wallet review and guide
All you need to know about Metamask – the browser extension digital wallet and a user-friendly bridge to the world of Ethereum decentralised applications.
Finder Cryptocurrency Predictions Report: October 2020
We asked 30 panelists for their cryptocurrency price predictions, the outlook for DeFi and how long they think high returns on yield farming might last.
Where to buy Dogecoin (DOGE)
A beginner’s guide to buying and selling this decentralised, peer-to-peer cryptocurrency.
Finder’s Bitcoin Predictions Report: December 2020
We asked 47 experts for their cryptocurrency price predictions and took a deep dive into the Bitcoin price rally.
Ask an Expert