The first asset backed as collateral in the DeFi loan platform Kava it will be Binance Coin (BNB).
The announcement was made on Reddit and states that users can use BNB as collateral to obtain loans in USDX, the stable currency of Kava.
Kava is a DeFi cross chain platform, based on Cosmos SDK, which can interact with various assets based on different blockchains, such as BTC, ETH, XRP or BNB.
The first asset that can be used as collateral will be BNB, which will allow Binance Chain users to make use of their own BNB tokens to get stablecoin loans through Kava.
To promote the initiative, BNB owners who will participate in the minting of USDX tokens by depositing BNB and applying for a loan in this stable currency will be able to earn rewards through Kava's Crypto Payday promotion. In fact, every Wednesday, for an entire calendar year, KAVA tokens will be distributed to those who have blocked BNB as collateral and have USDX tokens.
I know will distribute a total of 74,000 KAVA tokens, worth approximately $ 60,000, and the first distribution will take place on June 24, 2020.
The interesting thing about Kava's DeFi platform is that it will be possible to use assets in various blockchains to get USDX loans.
The choice to start with BNB is not accidental: Binance Chain is also based on Cosmos SDK, so your user base might already know its advantages and be more able to use the platform.
Kava's goal is eliminate the hassle of using multiple platforms and conflicts between blockchain supporters, as well as becoming the primary hub of the entire Cosmos ecosystem.
Currently, for example, to use Bitcoin as collateral to generate Ethereum-based DAI stablecoin ERC20 tokens, you need to convert BTC to ERC20 tokens of equal value, such as WBTC or pBTC, and then use them as collateral.
The process involves an additional step, which Kava wants to eliminate by allowing the direct use of any blockchain assets as collateral to generate USDX tokens.
Kava's decentralized lending platform will be online tomorrow, June 10, 2020, and will be available through wallets and exchanges such as Cosmostation, Forbole, Trust Wallet and Frontier.
The next candidates to join BNB as collateral for USDX are BTC, XRP and ATOM.