In an announcement on Sept 22, the cross-chain DeFi platform stated that it is embarking on the next phase of growth with the launch of the Kava Ecosystem.
Using funding from seed rounds, Kava is launching the $185 million Ignition Fund which aims to onboard high-quality DeFi projects and scale them for what it describes as the “coming wave of mainstream DeFi users.”
It added that selected Ecosystem projects will benefit from Kava’s highly scalable Layer-1 architecture and institutional-grade security. There are just three protocols running on Kava including the Hard Protocol, with $2.1 billion in total value locked, more than 280,000 users, and $1.8 billion in cross-chain transactions.
DeFi for the mainstream
Kava enables users to take out loans by locking in collateral in exchange for a soft-pegged USD stablecoin called USDX. It runs on the Cosmos blockchain and processes transactions from other blockchains such as Bitcoin and Ethereum.
It claims to have a fundamentally different approach to scaling than other DeFi protocols and networks, boasting up to 10,000 transactions per second. Kava is aiming to bridge the gap to enable mainstream adoption, CEO Scott Stuart explained:
“There’s a massive opportunity in DeFi right now to be the first to bridge the gap between the early adopters and the untapped mainstream. The Ignition Fund is about getting Kava there first.”
There is also a SAFU fund to protect user’s assets offering additional security which is necessary for mainstream adoption.
In late August, Kava Labs launched a cross-chain liquidity hub for DeFi called Kava Swap. The automated market maker aggregates collateral from other chains and offers liquidity farming incentives. It was audited by blockchain security firm CertiK.
KAVA price reaction
Kava’s native token of the same name has not reacted to the news well with a 6.3% decline on the day in line with the general market slump. At the time of press, KAVA was trading at $4.82 according to CoinGecko.
The token hit an all-time high of $9.12 on Aug 30 but has lost almost half of that in the three weeks that followed. There are 91 million tokens circulating giving it a market cap of $441 million which ranks the token outside of the top 100.
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