What is Kava (KAVA)?
KAVA is the native token for the blockchain of the same name. The Kava platform is a layer-1 solution that offers co-chain connectivity with Ethereum and Cosmos. Kava was built on the Cosmos blockchain and uses its token standard.
Kava is a decentralized digital environment for blockchain developers that offers high network speed and interoperability. The native token is used for utility, governance, blockchain security, and validation. Historical and live Kava price data is available in the chart above.
Who Founded Kava?
The Kava Labs co-founder team members are Brian Kerr, Ruaridh O'Donnell, and Scott Stuart. Kerr is an entrepreneur and a board member at Kava. He was formerly part of the esports organization Fnatic. O’Donnell is a software engineer and data analyst. Stuart is an entrepreneur and the CEO of Kava.
The goal of the Kava crypto project is to provide developers with a fast and efficient environment to build technologies for blockchains and Web3. While Ethereum is one of the widest-used blockchains thanks to its smart contract technology, it lacks the efficiency and speed of Cosmos.
The token was officially launched in late 2019. Prior to its release, the team held a private sale and an initial coin offering (ICO). At the time of launch, the Kava price was valued at roughly $0.80; however, in the following weeks, it exceeded the $1 threshold. In spring 2020, Kava experienced a decline, as it fell below its launch price point.
The first significant growth that the asset experiences occurred in August 2020. Then, the Kava price exceeded $5 for the first time. Similar growth was noted a year later, in August 2021. After a period of rapid fluctuations, Kava peaked at $9.12, which was the asset’s record for the year.
What is the Utility of Kava?
Kava is considered to be an inflationary asset as its supply is not capped and can be continuously produced. No anti-inflationary measures are set in place to regulate the KAVA price. Overall, Kava is a volatile asset that experiences frequent market fluctuations.
Since its inception, Kava has offered DeFi services, primarily focused on collateral lending. While the use of collateral is common in traditional finance, it’s yet to fully set its roots in crypto. Users are able to borrow and lend digital assets peer-to-peer, without centralized intermediaries.
As a DeFi service provider, Kava supports a broad variety of coins and tokens as collateral, including ATOM, BNB, BTC, and XRP. The network also has its own stablecoin, USDX. The USDX-Kava price is determined by the exchange rate of the USD. USDX is a mintable asset, and users receive KAVA as rewards for producing the stablecoin.
The Kava crypto network’s standout feature is the co-chain architecture binding it to the Ethereum and Cosmos networks. They were connected using a translation module that enables interconnectivity. The two co-chains provide different support for Kava to optimize its scalability, efficiency, and applicability.
Despite being co-chained to two networks, the Kava price is not pegged to or directly dependent on the ETH or ATOM prices. That being said, Kava has followed the general market trends, some of which were set by Ethereum as one of the biggest cryptocurrencies in the world.
Cosmos provides the network with its Tendermint consensus algorithm and the Inter Blockchain Communication Protocol (IBC), which improve the network speed and enable the interconnection of relay messages. The Cosmos integration also allows for lower transaction costs.
The Ethereum co-chain powers smart contracts via the Ethereum Virtual Machine (EVM). This enables the development of decentralized apps (dApps) using the Solidity programming language. Such dApps are interoperable with the software development kit (SDK) protocols offered by Cosmos.
Kava uses the Proof-of-Stake (PoS) consensus algorithm to ensure network security. This algorithm, known in the Cosmos ecosystem as Tendermint, requires users to stake their assets to act as collateral. By staking, users are eligible to act as validator nodes. It’s also possible to act as a delegator by binding KAVA coins to existing validators.
Any stakeholder can become a validator. However, they must strictly adhere to the protocol to maintain the role. If a validator fails to deliver the minimum network requirements or acts maliciously by validating inaccurate data, the blockchain penalizes them.
KAVA tokens are offered as rewards for becoming a validator node. However, such incentives are only granted to the top 100 nodes for their performance and network contributions. Stakers receive a portion of the KAVA emissions for providing support to the blockchain.
Kava functions as the decentralized autonomous organization KavaDAO. Only the users that have staked their assets—namely, validators, delegators, and other stakeholders—can participate in the DAO. Participation grants them the power to vote on new governance proposals. This process reinforces blockchain decentralization.