Several decentralized finance (DeFi) platforms have been launched in recent years to address the challenges faced in traditional finance. One of them is Kava. This protocol lets you borrow and lend a wide range of crypto assets without intermediaries. If you wish to learn more about Kava and how to buy its native token, KAVA, continue reading this guide.
Exploring Kava
Kava is a DeFi platform running on Cosmos, a blockchain that makes it possible for projects to be built on their own chains. Since Kava is developed using the Cosmos SDK, it can be connected to projects built on other chains within the Cosmos ecosystem, making it more accessible to users.
Kava is powered by the KAVA token, which allows holders to raise and vote for proposals that affect the future of the project.
One of the aspects that makes this DeFi project stand out is its offerings. Unlike most lending protocols, Kava allows users to borrow loans in stablecoin, thus shielding them from extreme volatility experienced in the crypto market.
All loans in Kava are issued using the protocol’s native stablecoin, USDX. To secure a loan, you need to deposit Bitcoin or XRP as collateral.
Kava’s Dual Coins
As you can see, Kava has two cryptocurrencies, KAVA and USDX, each serving different purposes.
Use Cases of KAVA
Secures the network – By staking KAVA, users help to keep the network secure.
Generates Passive income for holders – Everyone who stakes KAVA earns rewards in return.
KAVA serves as a reserve currency – In the event USDX depegs from its intended price of $1 due to over-collateralization of loans on the Kava platform, more KAVA tokens are minted to purchase USDX tokens, pushing the stablecoin’s price back to $1.
Use cases of USDX
As mentioned, USDX is intended to shield borrowers from high volatility. Additionally, borrowers can use their USDX loans to participate in leverage trading to increase their crypto holdings. However, you should keep in mind that although leverage trading promises higher returns, you risk losing heavily if the trades do not go as predicted.
A Guide to Buying KAVA
Purchasing KAVA is a straightforward process, considering that most of the leading cryptocurrency exchanges have listed the token. In this guide, we will be buying KAVA from Binance, undoubtedly the world’s most popular exchange. Follow the steps below to buy KAVA on the Binance trading platform.
Step 1: Create a Binance account
After downloading the Binance mobile app from the App Store or Play Store, you can go ahead and set up a trading account by providing your email or phone number. Do not forget to complete the KYC process in order to have full access to Binance’s features.
Step 2: Choose Trading Pair
As of December 2023, there are two KAVA trading pairs on Binance: KAVA/BNB and KAVA/USDT. That means you need BNB or USDT to get hold of KAVA. If you are holding other assets in your Binance account, you can convert them to BNB or USDT using the platform’s “Convert” functionality.
Once you have your USDT or BNB, go to the spot market and select any of the two mentioned trading pairs, then place a buy order. Your KAVA tokens should arrive in your Binance wallet within a few seconds.
Step 3: Manage Your KAVA Tokens
After purchasing KAVA, you can transfer the tokens to a non-custodial wallet like Atomic Wallet or SafePal. Alternatively, you can stake them on the “Binance Earn” platform to receive passive income.
A Guide to Buying KAVA Using a Credit Card
Instead of buying KAVA through the spot market, you can use your credit card to purchase the crypto asset. Here is how you do it. On the Binance app, click “Buy Crypto” and choose KAVA as the token you wish to buy. After that, select USD as your preferred fiat currency for buying KAVA. Next, select credit card as your payment method and enter the card details. Review the transaction and approve it. It usually takes less than a minute to complete.
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