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Kava (KAVA)

A Cross-chain Platform for Decentralized Finance

KEY METRICS [as at 16 Oct 2019]
TickerKAVA
Issue Price$0.46
Initial Circ. Supply13,691,632 KAVA (13.69%)
Total Supply100,000,000 KAVA
Project Websitehttps://www.kava.io/

RECENT NEWS

  • Sep 2019: Kava team gave an introduction to the Kava platfrom at the DeFi Meetup in Hangzhou
  • Aug 2019: Increased Kava testnet validator set from 100 to 150
  • Jul 2019: Kava team gave an introduction to the Kava platfrom at Hackatom Seoul
  • Jul 2019: Launch of Kava testnet 2000
  • Jul 2019: Release of Kava MINTSCAN explorer
  • Jun 2019: Launch of Kava testnet 1.1

PROJECT OVERVIEW

Kava is a cross-chain DeFi platform offering collateralized loans and stablecoins to users of major crypto assets, including BTC, XRP, BNB, ATOM, etc. Users can collateralize their crypto assets in exchange of USDX, Kava's stablecoin. KAVA is the governance and staking token responsible for securing the network and voting on key parameters.

WHAT IS KAVA?

Project Mission

Kava aims to be the de facto DeFi platform by providing a decentralized lending platform and stablecoins compatible with major crypto assets.

Project Value Proposition

  • Decentralized Loans & 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 & Derivatives: Kava is capable of growing to support a wide range of new crypto assets and offering new synthetics and derivative products.

Token Overview & Use Cases

The Kava platform has two types of tokens, the KAVA token and the USDX stablecoin. The KAVA token is the native token of the KAVA blockchain integral in the security, governance and the mechanical functions of the platform.

There are three main use cases for the KAVA token:

  1. Security - Blocks are validated by the top 100 nodes by weighted bonded stake in KAVA tokens. Economic incentives for validators come in the form of earning KAVA as block rewards, in transaction fees, and face losing KAVA based on strict slashing conditions such as failing to ensure high up time and double signing transactions.
  2. Governance - KAVA is used for proposals and voting on key parameters of the collateralized debt position ("CDP") system.

    This includes but is not limited to the global debt limit of the system, types of supported collateral, their debt limits, collateral ratio, fees, and the savings rate for USDX.

  3. Lender of Last Resort - KAVA functions as a reserve currency in situations where the system is undercollateralized. In such cases new KAVA is minted and used to buy USDX off the market until USDX becomes safely overcollateralized.

There are three main use cases for the USDX token :

  • Margin Trading / Leverage - Users that receive USDX from the platform primarily use it to purchase additional crypto effectively leveraging their exposure to crypto assets.
  • Hedging with Interest - Traders can hold USDX as a stable asset when seeking to limit exposure to volatile crypto assets. Holders can bond their tokens and receive accumulate interest equal to the current USDX savings rate.
  • Stablecoin Payments - The quick blocktimes and fast finality of the Kava blockchain enables USDX to be used for general payment use cases.

TOKEN SALE & ECONOMICS

KEY METRICS
Token Name KAVA
Token Type BEP-2
Private Sale 1 Allocation 30.05% of tokens
Private Sale 1 Token Price $0.075 / KAVA
Private Sale 1 Amount Raised $2.25MM
Private Sale 2 Allocation 5.02% of tokens
Private Sale 2 Token Price $0.25 / KAVA
Private Sale 2 Amount Raised $1.26MM
Private Sale 3 Allocation 4.93% of tokens
Private Sale 3 Token Price $0.40 / KAVA
Private Sale 3 Amount Raised $1.97MM
Binance Launchpad Sale Allocation 6.52% of Tokens
Binance Launchpad Sale Price $0.46 / KAVA
Amount to be Raised in Binance Launchpad Sale $3,000,000

Token Supply Distribution

  • Private Sale 1 tokens comprise 30.05% of total token supply.
  • Private Sale 2 tokens comprise 5.02% of total token supply.
  • Private Sale 3 tokens comprise 4.93% of total token supply.
  • Binance Launchpad Sale tokens comprise 6.52% of total token supply.
  • Kava Labs shareholders tokens comprise 25.00% of total token supply.
  • Token Treasury tokens comprise 28.48% of total token supply.

Private Sale 1

The Private Sale 1 was conducted from June 15th to June 30th 2019.

Private Sale 2

The Private Sale 2 was conducted from July 15th to July 31st 2019.

Private Sale 3

The Private Sale 3 was conducted from August 15th to August 31st 2019.

Binance Launchpad Sale

Sale will be conducted on Oct 2019 for a total raise of ~$3MM worth of BNB at ~$0.46 per token for 6.52% of total token supply. KAVA/BNB exchange rate will be determined prior to day of sale.


Token Governance & Use of Funds

All funds raised in crypto are either self-custodied and stored in multi-sig wallets, requiring at least 2 out of 3 signatures from the management team or are stored with a qualified custodian. Funds raised in fiat currency are stored in USD bank accounts. Spending of the funds needs the approval of the Kava Labs’ board of directors.

As of October 2019, Kava Labs has used approximately 15% of TGE funds according to the allocations below:

  • 45% Platform Development
  • 25% Business Development & Marketing
  • 10% Operations
  • 10% Legal & Accounting
  • 10% Other

KAVA Token Distribution

KAVA Token Release Schedule

The following chart represents the number and breakdown of all KAVA that are to be released into circulation on a monthly basis. In addition, block rewards are distributed to validators according to how many tokens are staked by the current set of validators. If the overall staked token amount is low, the APR for a KAVA validator will rise to a maximum of 20.00%; if the overall staked token amount is high, the APR for a KAVA validator will drop to a minimum of 3.00%.

ROADMAP & PROGRESS

Roadmap & Achievements

Roadmap & Achievements
PLANNED DATE MILESTONE COMMENTS
2019:Q2 Release of working MVP of Kava CDP system Medium
2019: Q2 Release of public testnet 1.1 Medium
2019: Q2 Kava Founder Rewards Program to incentivize users to run validator nodes Github
2019: Q2 Release of public testnet 2000 Github
2019: Q4 Release of public testnet 3000 The final public testnet before mainnet
2019: Q4 Mainnet launch N/A
2019: Q4 Release of Beta CDP System Available for developers to use at HackAtom DeFi in San Francisco
2019: Q4 Implement on-chain vesting for validators Github Pull Request
2020: Q1 Public testnet 4000 with Beta CDP system and Bug Bounty Program First cross-chain assets integrated into CDP system on testnet
2020: Q2 Cross-chain assets in CDP system on mainnet N/A
2020: Q2 Integrate custodial BTC Peg into CDP system testnet N/A
2020: Q3 Integrate both custodial and non-custodial BTC Peg into CDP system mainnet N/A

Commercial Partnerships and Business Development Progress

  • Ripple: Ripple is a company which enables banks, payment providers, and exchanges to send money globally conveniently using blockchain technology. Xpring, Ripple’s ecosystem division invested in Kava Labs, in March 2019. Kava intends support XRP as one of the first assets supported on the Kava platform.
  • Tendermint: Tendermint is the creator of the Cosmos Hub and Cosmos SDK. Kava is an official partner of Tendermint and aims to make ATOM one of the first assets supported on the Kava platform.
  • Validators: Kava has built a global network validators dedicated to securing and governing the Kava platform. Many of these validators are public Kava partners and can be found on Kava's website.

TEAM OVERVIEW

  • Brian Kerr
    Co-founder, CEO

    Former CEO of Fnatic Gear and Func, Advisor to Snowball and DMarket.io

  • Ruaridh O’Donnell
    Co-founder, Lead Blockchain Developer

    Former Engineer & Data Analyst at Levelworks, Deep Learning Specialist

  • Scott Stuart
    Co-founder, Head of Product

    Former CEO of Levelworks, Professional Poker Player.

  • Kevin Davis
    Lead Engineer

    Former Software Developer & Data Analyst at the USDA

  • Stan Press
    Head of Marketing

    Former Head of Partnerships at VY Esports, Managing Director of Gaming & Digital Strategy at Magid

  • Aaron Choi
    Head of Business Development, Asia

    Former CEO of GJ Exchange, VP of Global Partnerships at Chinapex, VP International Exchange BTCC

TRADING DATA

Liquidity

KAVA token is not actively traded on any exchanges as of the published date of this report. The token will be available through the Binance Launchpad portal.

TECHNICAL OVERVIEW

Github Overview

Public Github Repositories

Kava

The Kava Blockchain

5 Contributors   180 Commits  
Kava-Devnet

Research and Technical Specification for the Kava Blockchain

2 Contributors   142 Commits  
Kava-Testnets

Repository for Kava Public Testnets

57 Contributors   218 Commits  

PRODUCTS & METRICS

The main product for Kava is the Kava CDP Platform, where users can collateralize their crypto assets to take a loan in USDX, the stablecoin unit in the Kava ecosystem. The following diagram shows how the system will function once Kava's mainnet goes live.

For each testnet, several block explorers were built by community members. The following screenshot shows the MINTSCAN explorer built by Cosmostation from the Kava community.

BLOCKCHAIN & NETWORK DATA

Kava is built using Cosmos-SDK, an open-source framework for building public Proof-of-Stake blockchains. Core features of Cosmos-SDK include:

  • Tendermint Core Consensus Engine: A Byzantine Fault Tolerant consensus engine designed to support Proof-of-Stake systems.
  • Cosmos Modularity: As new open-source modules are developed for the Cosmos ecosystem, Kava can quickly implement desirable modules. For instance, the Inter Blockchain Communication module enables all Cosmos-SDK blockchains to communicate.

The following table shows the performance benchmarks of Tendermint Core:

Kava Specific Architecture & Design

There are 4 modules that make up the Kava platform’s core architecture, namely, Price-feed, Auction, CDP, and Liquidator.

Price-feed

The Price-feed module implements a simple price oracle where a group of white-listed oracles post prices for various assets in the system. Standard oracle software will be operated by Kava validators. The median price of all valid oracle prices is taken as the current price in the system and any validator found reporting prices outside of two standard deviations from the median price can be slashed. Addition and removal of assets and oracles is controlled by governance proposals.

Auction

The Auction module implements three distinct auction types that control the supply of bad debt and surplus in the CDP system.

  1. Forward Auction: A standard auction where a seller takes increasing bids for an item. Each bid increases the price, as well as the duration of the auction. This auction type is used when there is a surplus of collected fees in the system. The surplus is converted to stablecoins and sold for governance tokens.
  2. Reverse Auction: An auction where a buyer solicits decreasing bids for a particular item or lot of items. This auction type is used when governance tokens are sold (minted) in exchange for stablecoins, to cover shortfalls after failed collateral auctions.
  3. Forward Reverse Auction: An auction where a buyer solicits increasing bids for a lot of goods, up to some ceiling. After the ceiling is reached, each bid lowers the amount of goods being sold for the ceiling price. This type of auction is used when collateral is seized from a risky CDP and sold for stablecoins to cover the debt.

CDP

The CDP module is a factory for creating CDPs and storing the global state of the debt system. It allows users to create, modify, and close CDPs for any collateral type in the Price-feed module. It also sets the global parameters of the system, which can be altered by governance proposals. These parameters include the global debt limit (the total amount of stablecoins that can be in circulation), the debt limit for each collateral type, and the collateralization ratio for each collateral type.

Liquidator

The Liquidator module tracks the status of CDPs based on prices in the Price-feed module. It is responsible for seizing collateral from CDPs whose collateralization ratio is below the threshold set for that collateral type. Collateral seized will then be sent to the Auction module.

In the event of a CDP falling below the required collateral ratio, that CDP will be seized by the Liquidator module. When a lot of collateral has been seized due to liquidations, that collateral is auctioned by the Auction module for stablecoins using a forward reverse auction. In normal times, this auction is expected to raise sufficient stablecoins to wipe out the debt originally held by the CDP owners, along with a small liquidation penalty.

In the event where collateral auctions fail to raise the requisite amount of stablecoins, KAVA tokens are auctioned by the Auction module for stablecoins using a reverse auction until the global collateral ratio is reached. In this way, the KAVA token serves as a lender of last resort in times of under-collateralization.

COMMUNITY DATA

Kava’s community mainly consists of:

  1. Stakers & Validators: Responsible for the security and governance of the platform.
  2. Crypto Investors & Traders: The Kava platform’s user base.
  3. App Developers: The Kava platform’s functionality can be extended into existing platforms such as dApps, wallets with in-app staking, exchanges, etc.

Currently Kava's community growth strategies will mainly be focused on China, Asia Pacific, and the global English-speaking audience. Current community strategies include:

  • Expanding Ecosystem Advocates: Kava will continue to grow the robust developer and validator community and enable its key members to serve as Kava ambassadors to their local communities.
  • Increasing Collateral Types Supported: Integrate new cryptocurrencies to the platform encouraging new investors and traders to use the platform and join the Kava community.

Future community growth strategies of Kava include:

  • Incentivized Adoption Programs: Offer financial incentives for applications, exchanges, and other platforms to integrate the Kava platform's services and tokens.
  • Integration Partnerships: Integrate with dApps, wallets, and exchanges with large customer bases to gain distribution of KAVA to wide audiences.
  • Add New Synthetic Assets: Euro, JPY, CNH, synthetic BTC, etc.

Community and Social Channels

Kava community and social channels stats as of Oct 16, 2019

APPENDIX

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