Kava Labs Launches Protocol Upgrade With Eye on Institutional DeFi Lending

Friday 09 April 2021, 5:02 AM AEST - 2 weeks ago

Decentralized finance (DeFi) firm Kava Labs announced Thursday a protocol upgrade dubbed Kava 5 that gives users of apps built on Kava access to new features.

Kava Labs said the upgrade to its infrastructure, built on the Cosmos SDK, means there are a number of performance improvements for users, allowing them to borrow against multiple cryptocurrency assets and earn staking rewards.

The move comes at a time when DeFi is finding its legs on blockchains beyond its traditional home, Ethereum.

This upgrade will finalize the transition of Kava as a single application blockchain to an industry-leading DeFi platform complete with interoperable cross-chain tooling, secure price feeds and enterprise-grade reliability that financial institutions can trust, Kava Labs CEO Brian Kerr told CoinDesk.

Additionally, Kerr told CoinDesk the upgrade will also complete the Hard protocol, the first cross-chain money market built on Kavas platform that offers lending, borrowing and yield on cryptocurrencies such as bitcoin (BTC, +3.76%), XRP (+7.22%) and BNB.

The upgrade is aimed squarely at institutional investors and corporate treasuries, according to documents shared with CoinDesk, touting the ability for firms to get 25% APY on their bitcoin without counterparty risk. While the risk of traditional players not fulfilling their lending obligations is obviated, it should be noted that smart-contract risk and other factors certainly remain in play.

Convincing the institutions that hold Bitcoin to explore DeFi options will be a tall order, Kava Labs admitted in a statement.

Read full story on CoinDesk

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