Kava—a cross-chain and multi-asset DeFi platform trusted by financial institutions, has optimized its blockchain. It is upgrading to version 5.1 and activating the borrow side functionality of the Hard Protocol–a product built on the Kava blockchain.
Through the Hard v2 money market, banks and other financial institutions can earn 45 percent APR on their Bitcoin holdings without counterparty risks, a press release on March 8th reveals to the public.
Hard v2 is Live: Borrow-Side Functionality Activated
The upgrade makes the Hard protocol a fully functional money market, delivering on Kava’s promise. Presently, there is provision for borrowing with variable interest rates complete with HARD—the Hard money market’s governance token, incentivization to suppliers and borrowers following this upgrade.
As such, Hard v2 users can now borrow and lend different assets, including XRP, BTC, and KAVA, in an interlinked, secure, and scalable environment with HARD incentivization.
It comes when banks, investors, and deep-pocketed institutions continue to closely monitor crypto, specifically, Bitcoin. Over time, Bitcoin has evolved to be a store-of-value that can also act as a medium-of-exchange.
As a cushion against anticipated inflation, some public firms are buying large amounts of BTC as a hedge and diversification.
Bitcoin Whales can Now “HODL Harder”
Now that banks and whales have a huge amount of BTC on their balance sheets, they can HODL harder while earning passive income through the Hard cross-chain money market.
By participating in the Kava and Hard protocols, they can receive more tokens from incentives, all of which can be plowed back for even more passive income.
At the same time, long-term Bitcoin HODLers can earn superior yields, further increasing their exposure to BTC when they lend out via Hard V2.
This is a massive development in the decentralized finance and crypto worlds. Presently, a big part of the $1 trillion BTC lies idle on-chain.
Only a small percentage finds itself in Ethereum. Through tokenization, savvy DeFi users can participate in yield farming and more.
The problem is that Ethereum’s Gas fees are high and even more exorbitant whenever users participate in DeFi.
A Cross-chain, Scalable, and Secure Kava Protocol as the Base Layer
Kava and Hard protocols anchor on a scalable and secure blockchain built with the Cosmos SDK framework.
From this, transactions can be processed with negligible on-chain fees in a decentralized manner.
The most crucial distinction is Bitcoin and other coin users’ ability to participate in DeFi without tokenizing their assets while earning higher APR securely.
A notable feature with the Kava protocol and Hard money market is preventing users from paying capital gains accrued from trading activities.
Where trading prognosis can, at times, be wrong, the Hard money market can be a safe-haven for earning yields and staking rewards besides subsidy HARD tokens. Besides, a participant can go “long.”
Here, they can put up their BTC, borrow dollars, and buy BTC to leverage a position. At the same time, they earn HARD tokens whose valuation can rocket higher. These are assured gains over trading profits where volatility poses a significant risk.
Interestingly, with the current legal tussle and uncertainty surrounding Ripple and XRP, the Hard v2 protocol can provide a means of selling the coin. Here, a bear can put USD into the Hard Protocol, borrow XRP, and sell the coin.
The Era of Cross-Chain DeFi
Admittedly, public firms and institutional-grade investors might be slowed down by regulatory red-tape as relevant authorities must clear them.
In the U.S., they must file with the SEC for approval. Therefore, it might be a tall order for the same firms to invest their coins in other closed DeFi systems dotted with exploits and rug pulls.
Nonetheless, the absence of asset tokenization–eliminating counterparty risks, is a crucial advantage in the Hard money market. What’s more, users earn a superior 45 percent APR on their Bitcoin. Additionally, the ability to go “long” and channels of trading coins like XRP while earning HARD tokens as subsidy is irresistible.
Hard v2 and the Kava Protocol are positioning themselves as reliable money market and go-to cross-chain DeFi platforms, respectively. Through their solutions, investors—including institutions, can earn yield and participate in lucrative DeFi that’s slowly gaining mainstream adoption, using their Bitcoin.
A Call for Community Participation
Close followers of the digital assets industry know how Bitcoin and other cryptocurrencies have enabled users to take control of their funds to mitigate the need for banks and middle men. With Kava, users can custody their digital assets, store value, and make payments without facing to deal with fees or regulators who have time and again censored financial freedom.
That being said, with great power, comes great responsibility. The traditional inefficient way of managing finance is steadily being replaced.
Soon, the days of having a checking and savings account but not being in total custody of assets will be gone. Instead, the rapidly budding decentralized alternative to managing finance gives users complete control and power over their digital assets — Kava being a prime example.
That being said, however, Kava has had a lack of participation. The Kava community must own their responsibility to show up and vote for the ecosystem’s growth to establish Kava as a clear DeFi leader.