What is USDX (Kava)?
USDX is the native stablecoin of the Kava protocol. USDX price is designed to reflect the value of USD since it is pegged to its price. Kava is a DeFi platform that acts as a decentralized bank. It allows users to access a range of services, especially crypto loans. Users can borrow and lend multiple currencies without the need for financial institutions or other intermediaries.
Kava is based on the Cosmos and Ethereum blockchains. The developers opted for Cosmos to leverage the customizability and interoperability features of the network. The features add more functionality to the Kava protocol. Cosmos also allows Kava Lending Protocol users to deposit a wide range of other crypto assets such as BTC, BNB, ETH, and so on.
The protocol uses Cosmos Network to mint USDX stablecoins. Anyone with a digital asset can mint USDX by depositing their assets as collateral on Kava. However, to mint USDX, more crypto assets must be put into the Kava Mint program than the amount of USDX crypto assets that is intended to be minted. Besides, different crypto assets offer different collateralization ratios.
The platform also hosts other DeFi products, including a crypto exchange, an automated market maker (AMM), a yield farming platform called Foundation.fi, and a play-to-earn game – Elfin Kingdom.
All the platforms on the network have their individual tokens. However, the KAVA token is the main network asset, which exists above all the network tokens, tying the entire ecosystem up.
Use Cases of USDX (Kava) Tokens
USDX is a utility token with multiple use cases within the Kava ecosystem. Since the USDX price is more stable, it acts as a store of value. As a stablecoin, USDX also presents opportunities for longing or shorting assets. It can be used to lock in the value of highly volatile assets. Additionally, USDX crypto holders can receive extra incentives on Kava Lend, an exchange that also adds liquidity to Kava.
USDX coin is also tradable in some exchanges. However, though the token's value is designed to have a $1 value at all times, in theory, the USDX price may vary slightly at any time. However, the token is designed to self-adjust the USDX price to the value of the US dollar.
Who Founded Kava?
The Kava project was founded in 2018 by the Kava Labs foundation. The foundation was co-founded by Ruaridh O’Donnell, Brian Kerr, and Scott Stuart. In August 2020, the protocol went live on the Cosmos platform, allowing BNB as collateral for crypto loans in USDX.
