Kava: DeFi Token You NEED TO KNOW ABOUT!! 🔥

published on August 2, 2020

It's no secret defy is smoking hot right now that sentiment is hard to quibble with seeing that the entire d5 ecosystem has over 35 billion dollars in value locked up in it however the biggest d5 projects like

Maker compound synthetics and ave all have one thing in common they all operate on the ethereum blockchain now wouldn't it be great if there was a

Project that could bring all that defy goodness to assets outside of the ethereum ecosystem well there is a project that does exactly that and its name is carver my name is guy and in this video i'm

Going to tell you everything you need to know about carver i'm also going to explain why this d5 project offers a value proposition that you simply cannot ignore

And finally i'll go over the reasons why i think carver could be a game changer for d5 and i'll explore the tokenomics of both carver and carver's stablecoin usdx

now before i get going there are a few things i need to say don't let the t-shirt fool you i am no financial advisor i'm just a chap that loves crypto and

Tries my best to bring you the best educational content possible so if you're looking to dabble in d5 make sure you consult your financial advisor and do your own research now with that out of the way i want to

Give anyone new to the channel a warm welcome to the bureau i regularly put videos on different cryptocurrencies and give you my insights on the crypto markets so if that is something you think you could

Get value from then hit that subscribe button and flick on those notifications that way you'll be jacked into the coin bureau matrix right enough jibber jabber let's get

Into this now for those of you that are new to carver i need to give you a bit of an overview of the project if you're all clued up then feel free to skip ahead to the rest of my analysis

Using the time stamps provided below so carver's vision is to become a cross-chain d5 platform which offers stable coins and lending services to the holders of major cryptocurrencies basically

Carver is all about opening up access to liquidity for different crypto assets to people like you and me and doing that in a decentralized way that's all done by providing open access

To loans in the form of a stablecoin usdx which is soft pegged to the us dollar in short carver aims to extend a lot of d5's current capabilities that ethereum currently enjoys

And bring that over to other blockchains so how do you access that liquidity well you can send your crypto collateral over to carver's platform and the asset is then escrowed in the

Smart contract run on carver then a us dollar price for the asset is determined by the oracle system which is essentially a collection of price feeds whatever the median price of the asset

Is across the different price feeds that's the price used by carver to determine the usd value of the collateral the awesome thing with carver is that you can customize the collaterization

Ratio so you can open a collateralized debt position cdp with a hundred dollars in bnb collateral and twenty dollars in usdx can be minted if you wanted to get a loan for the

Minimum amount this would give you a collateralization ratio of five the important thing to know is that a cdp must maintain a collateralization ratio of above 15

Or it will be liquidated so in this example if the value of my bnb tokens hit 30 then i would have my bnb liquidated to get your crypto collateral back all you need do is repay the loan plus the

Stability fee to unlock your collateral at any time yes stability fee is a fancy term but all it refers to is a variable fee based on market dynamics the primary factor for determining the fee level is

The volatility risk of the asset hence the name stability fee the more volatile the asset the higher this fee will be so to get your collateral back you'll need to settle that stability fee in

Carver tokens do that and you'll get your collateral back so what is this fee well for binance coin you'll be paying five percent to unlock that bmb

Collateral so i know what you're thinking what blockchains and assets does carver currently support well the platform was launched very recently and only supports bnb

Coin right now however bitcoin and xrp are coming soon and it's theoretically possible to support all major crypto assets oh yes i nearly forgot to mention how you can earn high yield income on your crypto

Using the carver platform by the time this video hits the tube you should be able to earn that sweet sweet yield by becoming a usdx minter basically if you mint usdx using bnb collateral

Then you'll get a share of 74 000 carver tokens a week so how are those minting rewards distributed in our example let's say that there is a total of 1 million usdx globally

And i minted 100 000 usdx that would mean that i'd get 7400 carver tokens or a tenth of the weekly carver rewards here's the thing though to be eligible for your share of those rewards you will

Not only have to mint usdx but you need to keep your bnb staked during the week too now while these rewards seem pretty neat it does make me wonder whether carver loans could be applicable to your

Average person after all at face value it looks kind of crazy to entertain the idea of putting up 200 in crypto collateral and only getting issued with a 100

Stablecoin loan so let's take a closer look at that shall we here's the deal if you take out one of these over collateralized loans you effectively get that amount of margin to

Use to buy more crypto then you can put that loan back into another loan and further leverage your exposure to the asset this way the reason why many people find over collateralized loans confusing is that

Most traditional loans don't require you to put up collateral at all instead you're borrowing against your future cash flows the downside of that system is that you need to hand over a ton of identity

Documents to a third party have a reasonable credit score and find someone who's willing to give you the credit in the first place that's all well and good if you want to borrow a few thousand dollars

However i can nearly guarantee that if you ask your bank to lend you a pretty hefty amount say half a million dollars then most people will have to put up their house in a reverse

Mortgage as collateral but here's the thing the house is always worth more than the loan they give out if that weren't the case then the chances are the lender could not be in business for very long

Over collaterized loans in crypto work in a similar way and the same is true at carver your crypto is always going to be worth more than the loan you get what's neat about offering over collateralization is

That it allows carver to offer these loans algorithmically this is also what makes carver algorithmically stable and speaking of algorithms i'd love to

Spend a few moments to tell you about carver's tech so let's jump onto that carver is built using the cosmos sdk which is an open source framework for building public proof of stake blockchains

This means that carver uses the tendermint core consensus engine this is a byzantine fault tolerant engine that's designed to support proof-of-stake systems another thing that this sdk brings to

The party is interoperability that means that carver can bring all its utility functions to other blockchains that interoperability is a huge deal in my book think about maker and how it can only

Accept eth or erc20 tokens for example that is quite limiting and ties the future of the project to the growth of the ethereum ecosystem with carver on the other hand you don't have to rely

On one ecosystem another neat thing about using the cosmos sdk is that carver can leverages cosmos's modularity what that means is that as new open source modules are developed by the cosmos ecosystem

Then carver can choose to implement useful modules easily now if it sounds like carver have just used off-the-shelf solutions then you would be dead wrong basically there are four key modules

That make up carver's core architecture the auction module implements three auction types that control the supply of bad debt and any surplus in carver's cdp system

The first is a forward auction which acts the same way as you would bid for an item on ebay the second is reverse auctions and finally there is something known as a forward reverse auction

A price feed module has been developed to post accurate prices on the carver platform another awesome feature is that the addition and removal of assets and oracles are controlled by

Community governance proposals the cdp module basically allows kava users to create modify and close cdp's for any collateral type within the price feed module

And finally you have something called the liquidator module which tracks the status of cdps based on prices in the price feed module this makes sure that collateral is seized from cdps whose collateralization

Ratio is below the threshold set for that asset the collateral seized is then sent to the auction module that i mentioned earlier which then sells off the collateral for stable

Coins so what happens if the auction module cannot sell off enough collateral to cover the loan well if this happens carver tokens will then be auctioned off by the auction

Module for stable coins using the reverse auction system this will be done until the collateral ratio is eventually reached what this means is that in the event of under collateralization

The carver token is the backup plan for the platform and that is now a perfect segue for us to talk about carver's token or should i say tokens the first token is carver with ticker

K-a-v-a this is the staking and government's token on the platform on the government side of things the token works in a similar way to maker in the make a dao ecosystem

Carver holders can vote on proposals to make changes to the blockchain or set system parameters this includes things like supported collateral types collateral debt ratios etc etc now while voting is a great way to take

Part in the ecosystem you're not obligated to do it yourself kaaba holders can delegate their voting rights to validators who also secure the network if you want to see who the top carver

Validators are and what sort of commission they take then you definitely want to check out mintscani i've linked to that in the description below

When it comes to staking rewards carver is currently earning hodlers around 55 per year yes that's not the highest staking reward out there but it's not too shabby either of course this

Staking reward is variable like other staking coins the more funds that are staked the lower the returns and vice versa so if not a lot of people are staking then the maximum reward will be twenty

Percent and if a ton of tokens are staked then the reward will fall to a minimum of three percent so why the heck would someone want to hold and stake the carver token

Well here are a few reasons i have come up with the first is that owning carver tokens is a bit like owning shares in a decentralized bank that sets interest rates and controls the money

Being printed off the back of all those crypto reserve assets now i know i've mentioned the word bank and i know many of you are thinking about running for the hills however let

Me explain the way i think about the carver cdp platform is that any crypto asset put into it like binance coins is essentially a reserve

Asset after all it is this collateral which usdx coins are essentially being minted off the back of as soon as someone puts in crypto to take a loan out the protocol just prints usdx and

There's no counterparty there at all it's just the smart contract code that is issuing you that loan when you repay that loan the usdx is just destroyed or burned so in a way holding carver

Tokens is a bit like owning a part of the decentralized fed what's also cool is you can vote and support ideas you want to see on carver for example you might want to have the option of getting your loan

Paid out in a euro-stable coin the second reason revolves around why you would bother staking carver in the first place sure it might be easier saying you want to get a 55 return on

Your money through staking rewards however what's really happening with those staking rewards is inflation there are 33 and a half million circulating carver tokens right now

And a total supply of about 106 million anyone who stakes gets those inflationary rewards and everyone who doesn't effectively gets taxed basically non-stakers see their carver

Holdings shrink as a proportion of the circulating supply it actually acts almost like a tax on speculation after all if you're actively trading a token you're not staking it

The third reason to hold the token is that the central bank of carver has a deflationary lever anyone who pays back their loan has to pay a stability fee in carver tokens this is set at five

Percent at the point of shooting this video once the fee is paid the carver is then burnt so that's a deflationary mechanism this means that if the carver cdp platform is

Widely used then the kava token burn could quite easily offset the inflationary pressure of staking rewards after all carver can essentially add every major crypto asset and support it as collateral thanks to

Its interoperability i somehow get the feeling that when xrp is added to the platform that quite a few hodlers will want to leverage their positions via over collateralized loans let's face

It maker and compound are for eth and erc20 crypto assets imagine if that demand was replicated outside of the ethereum ecosystem for other

Major crypto assets carver really could be processing an insane amount of over collateralized loans in the not too distant future but don't forget people will want to get their collateral back

At some point and of course they need the carver token to unlock it by paying that stability fee it really could be the magic formula to increase demand for the token whilst overall reducing its supply and as we

Know from economics 101 this is positive for price the second token of the carver platform is their synthetic us dollar stablecoin usdx there's a little bit of controversy

Around this one allow me to give you the broad brush strokes essentially if you search usdx in coin market cap you'll find a stable coin but it is not carvers carver has accused

A project called d force of stealing the usdx token so just be aware of that so here is the big question why bother using usdx given that there

Are literally dozens of stable coins out there well firstly it's fully transparent unlike centralized fiat-backed stable coins you can see exactly what is backing the

Supply in this case it's collateralized crypto debt no need for trust you can instantly verify another reason to use usdx is that carver is decentralized and

It cannot really be shut down that's not the case for other stable coins like tether or usdc which both have centralized companies behind them it would be very hard for a government

To shut down a network spread throughout the world on a number of nodes the third reason to use usdx is that you can bond it and receive interest based on market dynamics you have to remember that usdx has collateral behind

It and you need the kava token to unlock that collateral part of that stability fee that is charged to unlock collateral is then returned to the usdx holders this means carver can create the savings rate for

Usdx so how much interest can you get right now on this stablecoin well how does 45 percent per year sound to you oh and here is one more reason usdx

Should be considered it uses chain link price oracles okay i'm a bit biased here as you folks will no doubt know i am a chain link proponent but access to secure off chain oracle

Solutions is essential for usdx to function after all if the data delivered is inaccurate or easily manipulated then the entire d5 ecosystem that relies on the stablecoin becomes

Well unstable what chainlink provides is a battle tested oracle solution not only for usdx but for the entire kava platform if you want to know why i have such faith in chain link then you might want

To watch my chain link video right here of course my analysis on the potential of the carver token and the advantages of usdx all hinge on the actual adoption of the platform we already know

Maker compound and rv have done pretty damn well on the ethereum blockchain so by providing an interoperable solution the hope is that carver could replicate that success and bring defy to a whole host of other

Assets all right team this video is getting pretty lengthy so it's probably time to share my closing thoughts on carver what really excites me about carver is that they designed the system so they

Can plug in any synthetic asset they want think exotic currencies like the philippine peso or thai baht or how about commodities like oil gold or silver

Carver could issue a synthetic asset pegged to literally anything that has a price that could give rise to a plethora of new ways that these assets could be used in the defy ecosystem i know carver

Opted to offer a usd stablecoin in their go-to market strategy but you can't take your eyes off the bigger picture the ethereum powered d5 boom has been an impressive one

With carver i have that niggling feeling that being able to offer similar functionality for the top crypto assets outside of the ethereum ecosystem could well be a slam dunk however i should not get carried away

And add a bit of balance to all this it is true that carver's cdp platform only supports bnb right now and it does slightly confuse me why bitcoin wasn't the first asset added

Maybe it was some sort of deal made at the time of carver's ieo launch on binance at the time of shooting this video the platform has only been live for a few weeks smart contract risks are

A real concern and the protocol has not been as well battle tested as some of the popular ethereum-based platforms you also then have to consider certain liquidation risks that come from black

Swan events let's not forget the black thursday maker dao vault liquidations this saw over eight million dollars liquidated from the vaults as opportunistic profiteering took

Advantage of a rapid fall of the price of eth with all that being said i cannot find fault in the tokenomics of carver provided that the platform actually continues to attract users

Lists more assets and continues to grow so if you think d5 really is the new financial paradigm and you want non-eth exposure to it then carver could be a good chat and that's it today folks my overview of

Carver i've done enough talking and now i want to hear from you what do you think about carver and have you got any questions use those comments below you've made it

To the end of this video so i assume you found it somewhat useful so don't forget to slap a like on this video and subscribe if you want to see more videos from me real soon thanks for hanging in there till the end

I really appreciate the support now that i have you i want to share something quite important with you have you heard of my weekly newsletter it's my way of succinctly crystallizing my views on the crypto market

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