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Kava Labs Launches Protocol Upgrade With Eye on Institutional DeFi Lending
New features from DeFi platform Kava look to get large bitcoin holders to lend – though the firm admits it could be a tall order.
Updated May 9, 2023, 3:17 a.m. Published Apr 8, 2021, 6:03 p.m.
Decentralized finance (DeFi) firm Kava Labs is offering a protocol upgrade dubbed “Kava 5” that gives users of apps built on Kava access to new features.
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Kava Labs said Thursday 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.
$KAVA 5 has successfully launched.
— The Kava Platform (@kava_labs) April 8, 2021
Congratulations Kava Community! pic.twitter.com/OtGElnBiJ8
Additionally, Kerr told CoinDesk the upgrade will also complete the Hard protocol, the first cross-chain money market built on Kava’s platform that offers lending, borrowing and yield on cryptocurrencies such as bitcoin, XRP and BNB.
Read more: New Binance-Backed DeFi Site Lets You Earn Yield on Bitcoin, Other Non-Ethereum Assets
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.
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