KAVA as DeFi: Passive Income And More (Simplified Article)


This article is pretty straight forward and written in simple words so that everyone can understand each part. I have tried to avoid complex things that newbies often don’t understand and get messy with.

What could be your best moonshot this season while many altcoins are blooming with DeFi in its heart? I choose KAVA as the best DeFi project that could outperform not only this season but also as a long term investment as well as earn passive income through staking and DeFi services. Let’s take a deep dive.



What is KAVA?

Kava is a cross-chain DeFi platform offering to collateralize loans and stablecoins to users of major crypto assets, including BTC, XRP, BNB, ATOM, etc. By collateralize crypto assets, users can borrow USDX. USDX is the stablecoin on KAVA platform. On the other hand, KAVA is governance and staking token that securely running the network.

While most other projects don’t have any working product, KAVA aims to the default DeFi platform by providing a truly decentralized lending service. Currently, the

Key Features KAVA offering

Decentralized loans and leverage:
Kava provides the users of major cryptocurrencies with open access to loans, leverage, and stablecoins for hedging.

Stablecoin hedging with interest:
Kava’s USDX stablecoin can be bonded, providing holders of USDX with a yield.

Extensible synthetics and derivatives:
Kava is capable of growing to support a wide range of new crypto assets and offering new synthetics and derivative products.

How Kava’s CDP Platform Works

CDP Platform is Kava’s primary product where users can utilize their crypto to offer decentralized loans and leverage. Currently, it supports BNB as collateral, soon it will add more top currencies like Bitcoin (BTC). Users use BNB collateral and get USDX which is a stable coin on Kava pegged to US dollar. One USDX is equal to one USD.

Kava’s CDP platform is similar to Maker DAO. It works the same way but with more advantages to using any other blockchain. Maker DAO is limited to use Ethereum blockchain only while KAVA uses multiple blockchian to bring advanced features a CDP platform could offer.

kava-app

kava-works

Ledger (hardware) wallet should be the most secure wallet to store and stake you KAVA, however, it requires advanced knowledge to operate and have some complex steps compared to handy mobile wallets like Trust, Frontier, or Cosmostation. If you choose Ledger, you should visit https://app.kava.io/ to access all the features.

Here is how to use KAVA CDP platform

  • Deposit crypto to the KAVA platform. Currently, it supports BNB only, so you should deposit BNB. Soon, it will add more top-level currency like BTC and ETH.
  • Create a CDP by locking the crypto (BNB) in the smart contract. In this process, you’ll get USDX (stable coin on KAVA) as a loan. (It is highly recommended to use at least 150% crypto as collateral to avoid any unexpected loss. But remember the higher the collateral, the lower the risk.)
  • Now you have USDX and you can do anything with it. Make some good investment if you like.
  • When you want to close CDP, simply repay the loan. After repaying the debt, the system will automatically burn the minted USDX and you get your crypto (BNB) returned.
  • In some cases, if the collateral value drops below a specified threshold, the system will liquidate your cryptos and you lose assets. This is why people use a higher ratio of collateral and debt.

Note: Each week Kava distributes rewards to all the USDX minter, here is the reward structure explained in their official blog.

Staking KAVA

KAVA delegation aka staking locks user’s KAVA and earns more KAVA in return at a rate of 4% APR. Staking Kava token is flexible and any amount can be staked even a fraction of 1 KAVA works fine. Users can unstake at any time however, there are 21 days unlock limit period. This means unstaked KAVA will be unlocked and usable after 21 days.

How to Stake KAVA?

Once you know how to stake KAVA, it takes less than 2 minutes to stake on your non-custodial wallets like Trust-Wallet or Cosmostation Wallet.

Choosing a wallet:

Trust-Wallet is the most user-friendly wallet and easy to navigate for what you want to do. However, Cosmostation has some advanced features and allow users to access both staking and lending-borrowing feature. But, I prefer using Trust-wallet since I love simplicity.

Staking KAVA on Trust wallet

It will take a few steps to delegate, I’ll show you step by step, so you can understand clearly. Make sure you have some KAVA in your wallet, any amount works but the greater the amount the higher the return. So, I recommend your maximum amount to stake.
Step 1.1
Open Trust Wallet and Navigate to KAVA token (Again, make sure you have some $KAVA on this wallet)

Step 1.2
Click on the “more” option which you can also see as 3 dots. In the pop-up menu, if you click on stake details, you’ll see your current status. We will get back to this later. For now, click on “Stake”

(Somehow Publish0x not supporting this media, please refer to the medium article to see the reference)

Step 1.3
In the next window, put your desired amount of KAVA or click on the “Max” button to stake the maximum available amount. Then choose a validator if you want, or leave it as default random one. (I prefer choosing one with higher APR rate to maximize earning)

Step. 1.4
Now click on continue and confirm “SEND”
The blockchain is confirming the transaction. It may take a few seconds.
Congratulations, if you did everything correctly, you delegation should be successful.

Step 1.5
Let’s check if everything was correct.
Click on the “more” (shown in step 2.2) and then click on “Stake Details”
It should show everything about your staking.

(Somehow Publish0x not supporting this media, please refer to the medium article to see the reference)

You can and should claim rewards from time to time when you see any unclaimed rewards available. I recommend doing this once every week and re-delegate them to compound your earning.

If you need more help, you can watch this video tutorial or contact Kava community in telegram.

How To Stake KAVA On Trust Wallet: Direct link to video

 

Note: You can unstake at any time, however, there is a locking period of 21 days.

Why should you consider KAVA as a reliable investment?

  • KAVA is a secure protocol, audited, and verified: KAVA has been audited and verified by several third party agency including Certik, B-Harvest, and Quantstamp. Certik alone audited twice, the second report published on Jul 14, 2020, you can read the announcement here. Also, B-Harvest audit report published Aug 12, 2020, read the report here.
  • KAVA is backed by industry giants: KAVA is backed by industry-leading companies including Binance, Huobi, Ripple, Cosmos, Okex, and Kraken.
  • Kava in the media: KAVA is being featured and discussed often in leading crypto media research and news channels including Binance research, Entrepreneur, ForbesCointelegraph, etc.
  • Developer community: KAVA got a great community that building tools and dapps on KAVA. Frontier wallet, Kava App, and Cosmostation wallet all are community build app.
  • Decentralized loan: KAVA is a decentralized finance platform that allows users to self-issue loans and repay debt. Everything is done in a decentralized way using a non-custodial wallet. So, the user never relays on anyone.
  • Stable-Coin: KAVA’s native stable coin USDX is used for issuing loans or paying the debt. So there is no loss when your crypto price moons.
  • Award Winner: KAVA won the ‘’2020 Binance Launchpad Project Award’’. Binance tweet linkhttps://twitter.com/binance/status/1282995454448304128
  • Multicollateral support: Kava will support multiple collaterals including Bitcon, Ripple, and many other top blockhcain tokens.

kava-defi

Wrapping up

Recently KAVA partnered with BNB48 Club and Swipe. I take both as a great aggregator to make kava more familiar as BNB48 Club will promote KAVA DeFi products in China. At the same time, Swipe brings a huge opportunity to buy Kava with a credit card as well as a bank account. I think this stable growth could lead Kava to establish a path of mass financial freedom.


 

This article first published on my medium blog, you can read it here

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