Kava Labs AMA Summary with Decentralized Club ✔️
Dear, Community,
Welcome to our community on t.me/decentralized_club Telegram group’s AMA. We really appreciate all your support. There were really good and thoughtful questions that were asked. For those who missed our AMA, this blog post is for you :)
✔️Introduction with Kava Labs :👉
Trader(BILLY):
Q1. Can you introduce yourself and for those who are living inside a cave illuminate what is KAVA about?
Aaron Choi | Kava:
I’m Aaron Choi, Head of Business Development Asia and I run anything to do with Kava’s business in the asia regions. Before Kava, i was involved with crypto exchanges, starting an exchange called GJ and also before that running the exchange business for BTCC.
Trader(BILLY):
Running an exchange do teach you quite extraordinary business skills.
Aaron Choi | Kava:
I guess in short terms, Kava is building a DeFi protocol that is natively cross-chain interoperable to support lending and other new DeFi functionalities for main crypto assets.
Trader(BILLY):
Looks like KAVA found a serial business man for the job.
Aaron Choi | Kava:
Thanks, yes being involved in the exchange business really shows you a lot of the industry and how some things work.
Trader(BILLY):
In few years when DeFi starts making galactic impact KAVA can proudly state it was there since the beginning
Aaron Choi | Kava:
The business I do is serious, but i definitely don’t try to be so serious haha.
One of the things Kava wants to do right off the bat is to be a real leader in creating cross-chain support for DeFi. Currently the DeFi space is mainly on ETH, but we see so much more growth elsewhere.
Trader(BILLY):
Q2. As me moved into 2020, what is Kava planning to achieve in Q1 this year?
Aaron Choi | Kava:
So we had some high level goals for KAVA this Q1. Very briefly, some of them included getting KAVA traded in some large, trusted exchanges, roll out our CDP platform, begin to work with some partners on integrating KAVA into their products, like other wallets and DeFi service providers.
Trader(BILLY):
So you guys are already in binance. Any more we can expect more before end of Q1?
Aaron Choi | Kava:
As we crossed the halfway mark of Q1 recently, we’ve been looking over our progress as well as our future plans. We’ve done some great listings over the past few weeks with partners such as MXC, Bitmax, Bitrue, and today Biki. And we’re still constantly working on getting more exchanges and opening up more ways for people to obtain and stake Kava.
As for our product side, our newest testnet has launched with our CDP testing on it. Where we hope to be releasing our CDP on mainnet soon. and constantly we are getting new partners and wallets on board.
won’t be able to announce before our partners announce, but keep an eye out. We’ve got more exchanges coming down the line.
Trader(BILLY):
That’s a lot of targets achieved with breakneck speed. Take a breather guys!
Q3. Can you explain a bit regarding USDX and CDP and how it affects KAVA?
Aaron Choi | Kava:
So our CDP (collateralized debt position) system allows users to take crypto that they own, and obtain a loan in USDX from that amount. It can allow users to expose themselves to more leverage on crypto that they own. Once users collateralize their crypto on the Kava Blockchain, they can then mint USDX up to a certain percentage of the total value of their collateralized amount. In order to have the collateralized crypto returned, users will have to pay back the USDX loan plus a fee.
Everytime our Kava Blockchain is interacted with, KAVA can be used to pay fees, as well as when CDPs are closed, KAVA will be burned.
Trader(BILLY):
If the market surges and the collateralized crypto increases in value will the fee also change?
Aaron Choi | Kava:
the fee will be set in KAVA terms, so if KAVA’s price increases, then yes the “fiat value” of the fee will change accordingly. and similarly if KAVA drops in price.
the fees themselves will potentially be set by our governance setup. where kava holders can vote on proposals to change and update parts of our system.
Trader(BILLY):
Q4. Finally, how do you plan to protect the Assets value in case of a market crash ?
Aaron Choi | Kava:
but thats a lot longer down the roadmap after we release the CDP first haha
So our main goal is to protect the value of USDX in any situation. If all of crypto goes through a black swan event and drops a lot in value (which could very well happen), we’d need to make sure that we have ways to still support USDX’s price
For sure, a lot of users that have assets in CDPs would be heavily affected. Their CDPs would potentially be liquidated to cover. This would be almost unavoidable and is part of the risks that users with opened CDPs would have to consider.
Trader(BILLY):
Thanks, for explaining simply about the risks involved. But I guess its inevitable in crypto no matter where you are
Aaron Choi | Kava:
For Kava to keep USDX stable, we would first go through our governance system to vote on measures to keep our system healthy. Things like collateralization % requirements, or stability fee measures or interest rate type changes would be proposed.
If those measures still don’t work, KAVA is a lender of last resort, meaning that KAVA can be inflated to make sure USDX does not lose in value.
🐧Community ask Questions by Twitter ✔️
Trader(BILLY):
🐧Twitter Question No 1 :
Username @Iyanbgz1
Southeast Asia is a very vibrant market and most exchanges are competing campaigns here to entice users and grow,
with KAVA you see how Southeast Asia is and do you plan to develop & expanding here?
Question Link 🐋 https://twitter.com/Iyanbgz1/status/1231873876705136640?s=19
Aaron Choi | Kava:
regarding south east asia, i’m super excited about the potential growth there (actually i think south and south east asia are both huge untapped markets for crypto). We’re looking at different regions and how to best approach the markets there. I think the most important thing to realize about these markets is that each region is completely different, and that there is no one size fits all approach that works.
Working with trusted local partners and media, as well as finding local exchanges that might have better fiat connections is super important. We also look to engage with the local communities as these fans will eventually become our base for growth.
Trader(BILLY):
🐧Twitter Question No 2:
Username @Soner62998541
- Why does Kava choose USDX name but not USDY, USDM, ZUSD, ….? Does it have any special meaning?
- What is the difference between USDX and other stablecoins like: USDT, TUSD, USDC, …?
Question link 🐋 https://twitter.com/Soner62998541/status/1232016944137674753?s=19
Aaron Choi | Kava:
We chose USDX way back in the day, even before we were working with tendermint/cosmos. We chose USDX when we were still working on Ripple-based technology. At the time there was a focus on Xpring, and we thought that USDX is a name that sounds awesome, as well as makes reference to Xpring. When we moved onto Cosmos, we didn’t want to part ways with USDX and decided to keep the name since its still a pretty awesome name.
The main difference of USDX is that we are a completely crypto-backed algorithmically stable stablecoin. USDT, USDC, TUSD, are all coins that are backed by real USD dollars in bank accounts. (or should be)
Stablecoins like USDX are backed by the crypto held in CDP and are usually overcollateralized to prevent the loss of value of the peg.
✍️ Telegram live Questions answered by Kava Labs : ✔️
binance trustbison2.crypto loyalist:❓⏩
How does the LEVERAGE WORK? I READ THAT AM ABLE TO Leverage assets with Kava’s cross-chain CDP PLATFORM, PLEASE EXPLAIN ABOUT THE CROSS CHAIN CDP PLATFORM
Aaron Choi | Kava:
Basically what you do is that you take your crypto holdings, collateralize them in a CDP, mint USDX at a % of your collatioteralized value, then you can use the USDX to buy more crypto (if you’d like), and then you can put that crypto back into a Kava CDP
Mission:❓⏩
How secure my tokens are if I use them as collateral in KAVA? Is there any safe system like stop loss or any such implementation to avoid loss?
Aaron Choi | Kava:
You can collateralize your crypto in a Kava CDP without minting USDX (taking out a loan), if you do that, this is completely safe. Your collateral is not at risk. If you do take out USDX, then you’ll have a risk of liquidation. You will be required to make sure that you keep the amount of crypto above the liquidation ratio.
Sergey :❓⏩
Does the KAVA team plan to work with governments of friendly jurisdictions and invest in banking licenses? As the industry grows, entering new markets?
Given that unlike the same single-collateral MakerDAO, KAVA will be a multi-collateral CDP system. In this regard, the following question.Does KAVA have a clear risk management model or strategy and how decentralized is / will it be?
What do you expect after the launch of Kava CDP and from 2020 as a whole in relation to the project in the long term? USDX is currently a little-known stable coin. Do you plan to add it to the top exchanges with good liquidity ?
Aaron Choi | Kava:
Kava plans to work in any regions that will be friendly for us to operate and grow in. Some of these might be regulations driven. We’re approaching this opportunistically
Our risk model is that each CDP is individually managed. And that our entire governance of Kava will be managed by all KAVA holders.
Our plan is to introduce USDX to a lot of the top exchanges, as well as wallets and other services.
We have a lot of work ahead but we’re looking forward to tackling those challenges
Gue Siapa:❓⏩
1. As a developer, which program languages can i use in kava core smart contracts ?
2. How secure your fully on-chain liquidity protocol & What’s is a core Smart Contract ?can you briefly explain.
Aaron Choi | Kava:
Our kava library is mostly coded in Go, but i believe we also support java. Because we’re building on Cosmos tho, i believe there will be more languages that we support.
We don’t have smart contracts exactly, but we look to support smart contract type migration via ethermint
ADS MAVI:❓⏩
Case 1: Between $300K and $1.2M Tokens Stolen on IOTA network and then IOTA team STOPPED the network.
Case 2: DeFi lending protocol bZx has just been exploited and then bZx team PAUSED the CONTRACT.
Considering these cases,
Does blockchain/DeFi really prevent CENTRALIZATION ?
Really offer DE-CENTRALIZATION ?
Aaron Choi | Kava:
I don’t believe that IOTA was decentralized.
bZx was also not decentralized enough. But teams need to weigh the risks. The importance needs to be on security of capital and if that requires some more centralization to do so, then teams need to absolutely make that clear to their users.
Nagan Prosky:❓⏩
Will KAVA have APIs and other tools to integrate with other platforms?
Aaron Choi | Kava:
Kava is building a DeFi protocol and as such, we are developing dev tools to allow anyone to interact with our blockchain. You can check those repos out at our github. github.com/kava-labs
Srintiel:❓⏩
Btw, KAVA is a bit unique because it use Cosmos/Tendermint. While other DeFi use Ethereum , why you. guys choose Cosmos?
Aaron Choi | Kava:
kinda answered this above but wanted to stress that we actively chose to stay away from Ethereum from the start mainly because we belived there was a dearth of DeFi available for other chains, particularly for BTC. We are still looking into if we want to support ETH eventually.
Hoso:❓⏩
You organized an AMA session very rewarding and received a lot of questions related to utilities and technology, future vision, …
So now I want to ask what do you want to receive from the community?
Aaron Choi | Kava:
great question. and this will be my last question I love talking about Kava and how we can change the world. You gotta be a dreamer to work in crypto and i believe in working on products that can product life-changing things.
I think that what I want the community to understand more about Kava and get as excited about Kava as I do. We’re working on such interesting problems that are at the bleeding edge of crypto and really can have such an great impact on the financial world. things that actually can affect the end user, way more than what some banks do at some high level that users don’t really see, because they can’t use it, but that still very negatively affects them overall.
The CDP platform that we’re building is just the beginning of what we want to build at Kava. We’re looking for more developers to utilize the tools that we are providing and build other DeFi services on our chain.
And we want our community to really be integrated to what we’re building and let us know what they want us to provide them with.
Red Queenᴺᵉᵏᵒᶠⁱᵉᵈ✔️Verified🇮🇩:❓⏩
Q1. Why do you want to develop KAVA in Southeast Asia ?? what is the reason, aren’t these countries developing countries.
Aaron Choi | Kava:
As a DeFi loaning platform, we see loan businesses play a large piece in developing counrtries. Some of these businesses are quite predatory. Crypto should be able to bring in cost savings and thus provide lower costs and lower frictions for borrowers to get their loans.
Kambing:❓⏩
Hi @a1choi
How KAVA will maintain the stability against market fluctuations and compete with other Stablecoins such as DAI, EURS , USDT ?
Aaron Choi | Kava:
I think stablecoins compete in terms of liquidity. USDT is by far the giant in the room. But i believe our differenciator is that we are a completely crypto backed stablecoin, where, regulatorally we might be able to work with some partners that might not be able to work fiat-backed stablecoins. Also, the fact that we will have multiple types of collateral to back our coin, means that the risks will be lower than just having 1 type backing.
Erven James Sato:❓⏩
What is the IMPORTANCE of BNB, ATOM, XRP,and BTC to KAVA?
Aaron Choi | Kava:
These are the first 4 assets that we will be supporting, but we are constantly looking at other assets to support as collateral.