Data Sources:

Data Sources:Kava dashboard （https://footprint.cool/Dt4O）

In November, Kava released the Kava 9 mainnet upgrade notice. Since then, Kava has successively announced ecological cooperation projects, including GameFi, cloud services, blockchain security and other partners, and the ecological territory is expanding.

On December 16, Kava launched Kava9's testnet incentives. The incentive activities before the historical mainnet upgrade have driven the rise of TVL and KAVA currency prices. Therefore, this upgrade has also attracted the attention of the encryption market.

Kava's DeFi Upgrade Road

In 2019, Kava entered the public eye as a lending platform with the label of "Cosmos Ecological Star".

The biggest feature of Kava is that it fills the gap in the cross-chain lending market. Most DeFi applications, especially the relatively deserted lending platforms, are limited to the public chain ecosystem. However, both the Kava protocol and the HARD protocol support deposits and loans of cross-chain assets. This allows investors to borrow across the chain in the Kava ecosystem, mortgage Kava ecological assets, loan cross-chain assets; or mortgage cross-chain assets, loan Kava ecological assets.

As of 2021, Kava will continue to upgrade in the ups and downs of the DeFi market, from cross-chain lending applications to Layer 1 DeFi public chains, and gradually improve its cross-chain ecological layout.

image description

Data Source: Footprint Analytics - Kava TVL Trends

Upgrade key memorabilia

• On June 11, 2020, the Kava 3 mainnet upgrade was completed, and the first cross-chain lending platform CDP was launched, which supports mortgages of BNB to lend USDX.

• On October 15, 2020, the Kava 4 Gateway mainnet upgrade was completed, supporting the operation of the cross-chain money market HARD Protocol.

• April 9, 2020 ushered in the official launch of the Kava 5 mainnet

• On the evening of August 30, 2021, the Kava DeFi platform completed the upgrade of the Kava 8 mainnet

• It is estimated that in the first quarter of 2022, the Kava 9 mainnet upgrade is expected to go live

image description

Data Source: Footprint Analytics - KAVA Price Trends

As a star project, its growth rate also appears to be insufficient compared to the explosion after DeFi Summer.

What caused Kava's slow growth, let's find out from Kava's ecological project, token economy.

Kava Ecological Status

Generally speaking, as a public chain, Kava is in the early stage of development, and there are two obvious problems

• The ecology is weak. At present, it is mainly a project of the Kava family. The project that announced the ecological cooperation has not yet landed

• The token economy is not stable enough

In this article, Footprint Analytics examines both of these issues in more detail.

The ecology is not prosperous and the liquidity is lacking: TVL is independently supported by the Kava "family"

Currently Kava mainly consists of 3 projects

• Kava Mint, which allows users to take USDX stablecoin loans using their assets as collateral

• Kava Lend, which allows users to earn rewards by supplying and borrowing assets from money markets

• Kava Swap, which allows users to buy and sell tokens on the Kava chain and earn rewards by providing liquidity to mining pools

image description

image description

Data source: Footprint Analytics - Kava Ecological Project TVL Proportion

Observing these three ecological cornerstones from Footprint Analytics data, Kava Mint is currently the project with the highest TVL, accounting for more than 50%.

However, as Kava Lend, the first cross-chain currency market, and Kava Swap, a cross-chain AMA protocol launched in August, TVL is still at a relatively low position.

At present, there are not many types of Assets and currency pairs that can be borrowed in the project, and the ecological liquidity is insufficient, which only revolves around the lending and exchange within the Kava ecosystem. For example, Kava Swap, although it provides super high APY rewards, only the basic currency pair of USDX is in its liquidity pool.

The distribution of platform tokens is unreasonable, and there is a greater risk of selling

Token of Kava Ecologyimage description

Data source: Footprint Analytics - Kava ecological project governance token price trend

Platform token KAVA

KAVA is the token used to govern the Kava blockchain, and KAVA also acts as the system's lender of last resort. If there is insufficient collateral for the entire system, KAVA will be minted to buy back USDX until the system reaches a sufficient amount of collateral again.

image description

Data source: Kava - KAVA distribution

There are few stable currency application scenarios

image description

Data source: Footprint Analytics - stablecoin USDX price trend

Can this upgrade turn Kava upside down?

The biggest highlight of the upcoming Kava 9 upgrade is that the upgraded Kava will officially enable the blockchain communication protocol IBC. This has two major implications for Kava:

• In view of the cross-chain structure of IBC, USDX may enter the DeFi project of Ethereum through IBC, become the settlement unit of the decentralized exchange, and have more application scenarios. Kava's token economy can be more stable.

• This will enable all projects and communities that support IBC to integrate their products with the Kava chain. For projects, they will obtain various functional scenarios in Kava's cross-chain DeFi ecosystem. For Kava, this upgrade will Greatly improve the inclusiveness of ecology.

The Kava 9 upgrade also includes the completion of the infrastructure construction of the Ethereum cross-chain bridge, Kava Launchpad, support for the Keplr wallet, etc., which provide the foundation for the subsequent growth of the Kava ecosystem.

Kava aggregates the intersection of two popular trends in DeFi, lending and cross-chain. But relying solely on the projects of the Kava family is not enough to support the development of a public chain.

Footprint Analytics is a one-stop visual blockchain data analysis platform. Footprint assisted in solving the problem of data cleaning and integration on the chain, allowing users to enjoy the zero-threshold blockchain data analysis experience for free. Provide more than a thousand tabulation templates and a drag-and-drop drawing experience, anyone can create their own personalized data chart within 10 seconds, easily gain insight into the data on the chain, and understand the story behind the data.

About Footprint Analytics:

Footprint Analytics is a one-stop visual blockchain data analysis platform. Footprint assisted in solving the problem of data cleaning and integration on the chain, allowing users to enjoy the zero-threshold blockchain data analysis experience for free. Provide more than a thousand tabulation templates and a drag-and-drop drawing experience, anyone can create their own personalized data chart within 10 seconds, easily gain insight into the data on the chain, and understand the story behind the data.

This work is original by the author, please indicate the source for reprinting. Commercial reprinting needs to be authorized by the author, and those who reprint, extract or use other methods without authorization will be investigated for relevant legal responsibilities.

Discord community: https://discord.gg/3HYaR6USM7

WeChat Official Account: Footprint Blockchain Analysis (FootprintDeFi)

The above content is only a personal opinion, for reference and communication only, and does not constitute investment advice. If there are obvious understanding or data errors, feedback is welcome.

Copyright Notice:

This work is original by the author, please indicate the source for reprinting. Commercial reprinting needs to be authorized by the author, and those who reprint, extract or use other methods without authorization will be investigated for relevant legal responsibilities.