DeFi is one of the best things that happened to the cryptocurrencies. It not only tries to free the users from the clutches of the banks but also allows one freedom to secure their assets.
Kava is one such platform and a protocol that allows users to lend, borrow, earn for their money staked in the smart contract. This platform is a for-profit DeFi, so it's to some extent a form of a CEX and CeFi but it does most of it's operation without any regulation and the control of govt.
So let's take a look at what is Kava DeFi and how does it work.
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Kava is a protocol that allows you to lock your crypto assets and in turn earns you KAVA tokens. These tokens are earned which can be exchanged for other assets.
So let's say you want to take loan by keeping your bitcoin as a collateral. You add your tokens in your KAVA and then you can take out the USDT for your investment.
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In case of you lending your bitcoin, you earn the KAVA tokens which earn you as an interest for such type of the lending activity.
When the user locks his collateral and the market value for the collateral asset drops the amount being given to the user. The smart contract watches the change and burns the collateral to recoup the money. This is one reason many users keep the strong cryptocurrencies as a collateral and USDX is adjusted in debt to collateral accordingly.
In order to peg the token to the USD value. KAVA has managed to mint the USDX as a collateral token in the ecosystem of KAVA blockchain. Anything loaned, lend, and staked is given back in terms of the USDX minted from the blockchain.
You may find that currently they are accepting the BTC, Binance, Binance USD, XRP, Kava token, HARD token into the earn system. Here based on the daily APY value changes you can lock the asset accordingly and the earn the respective APY out of those investments.
As you can see DeFi like KAVA has the power to make the loan and lending process easier in the real world. And you don't have to worry about giving up your life if you don't pay back. And also the collateral handles your hard work.
Also for those who are lending they can get their investment back along with the interest earned through such type of the investment. So the DeFi of this type of the investment platform is definitely worth investing into if you are planning on investing and don't want to worry about what goes in backend and in depth behind the blockchain stuff.
For people who wish to invest into one click DeFi investment for earning through staking or lending, KAVA protocol is something worth looking into in near future.
