An In-Depth Look Into Kava Swap: Cross-Chain Swapping

Kava Labs is on the verge of releasing their latest product. Here’s a look at how the project has been positioned ahead of the launch.

Introduction

Kava Labs is a blockchain project founded by Ruaridh O’DonnellBrian Kerr, and Scott Stuart, with a mission to decentralize financial services so that anyone anywhere in the world can access them. To achieve this goal, the development team built a cross-chain, permission-less, and censorship-resistant blockchain called the Kava Chain. The chain was built using the Cosmos software development kit (SDK), making Kava Labs the first DeFi platform to build on the Cosmos Blockchain. The team chose to use Cosmos rather than the Ethereum network because of Ethereum’s high gas fees and slow block times. As explained by co-founder Brian Kerr, deploying on Cosmos enabled Kava to build more efficient price oracles and dApps that are simple to debug.

The Decentralised Finance (DeFi) sector is quite broad, and it is often challenging for all the parts from different blockchains to work together. This workflow issue is one problem Kava Labs wants to solve by assembling all the different parts of DeFi, enabling them to work together seamlessly. Kava has already launched two successful cross-chain products: Kava Lending and Hard Protocol. Following up on numerous achievements in the year 2020 and in compliance with its roadmap for 2021, the announcement of Kava Swap comes as yet another boost to the platform. Their previous projects, Kava Lending and Hard Protocol, have been well-received by investors. Here’s a quick look at those two projects.

Kava Lending

Kava Lending is the first cross-chain DeFi hub to offer lending services. It enables users to take loans by depositing their BNB assets as collateral whilst receiving the borrowed funds as a stablecoin, the USDX. The team has provided users further insight on the benefits of Kava Lending and how it works through their Kava Protocol 101 tutorial.

Hard Protocol

Source

Hard Protocol was launched in October 2020 to extend Kava’s services by leveraging the security and interoperability of the Kava blockchain. Hard Protocol is decentralised and is the first cross-chain money market. It supports cross-chain assets such as BTC, XRP, USDX, KAVA, BNB, and BUSD. Hard Protocol gives users of different chains access to loans and interest-bearing accounts, enabling them to earn more from their assets. 

Now that we’ve taken a look at previous Kava Labs products, let’s dive into their latest project – Kava Swap.

What Is Kava Swap?

Kava Swap is a cross-chain autonomous market maker. It is a protocol that will enable users to swap their assets from one blockchain to another seamlessly. Thus, users can improve their earnings by quickly moving their assets from one chain to another so as to take advantage of better offers in different markets. 

Kava Swap is designed to help aggregate capital and make it available for use across different blockchains and DeFi. 

Source: Kava

How Kava Swap Works

Kava Swap will leverage Kava blockchain’s cross-chain bridges and oracles to provide three primary services. Here’s a brief overview of the services provided by the proposed exchange.

1. Liquidity Supply

Users can deploy their crypto assets to Kava Swap’s liquidity pools. 

2. Swap

This is the base function of the AMM and enables users to swap their assets cross-chain. 

3. Earn

LP providers will earn trading commission and Kava Swap’s governance token. 

The proposal also says that the deployment of Kava Swap will be in four stages, 

Version 1: Version 1 will come with initial support for BTC, XRP, BNB, BUSD, USDX, KAVA, HARD and SWP swaps. It will also permit new assets to be added by governance approval. 

Version 2: This version will mainly migrate Kava Swap’s functionality to an Application Programmable Interface (API) for integration with other supporting apps. 

Version 3: A new feature, Smart liquidity bridges between Binance Smart Chain and Ethereum ecosystems, will be incorporated. This feature will expand Kava Swap’s functionality and enable users to trade across multiple AMMs and DEXes in different ecosystems. 

Version 4: It will see the addition of more bridges that will further facilitate the flow of liquidity between Kava Swap and other DeFi applications. 

The proposed timeline for deployment of Version 1 is as follows, 

July 12, 2021: Launch of Kava Swap on Testnet with incentives for users. 

July 14, 2021: Completion of Audits of Kava Swap’s smart contracts. 

August 12, 2021: Kava Swap goes live on mainnet. 

Tokenomics

Source: Medium

The platform will have a governance token which for now will be known as the Kava Swap Token, with a total supply of 250 million. The percentage distribution will be as follows: 

Community – 55%

Treasury – 25%

Team – 15%

Initial Exchange Offering (IEO) – 5%

More details about Kava Swap and its features can be found in their official preview

Source : bsc.news

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