Introducing Kava Earn

June 8, 2022
4 min read

Simplified DeFi strategies on the Kava Network.

Kava recently shared a simple yet powerful strategy to get the most out of BUSD using Kava’s DeFi products.

Now, users can use strategies discussed in that article all from one place, bundled into a few simple steps. Keep reading to learn more about Kava Earn.

What is Kava Earn?

Kava Earn is DeFi made easy. The Kava team has combined the functionality of Kava Mint, Kava Lend, and Kava Swap to provide pre-made DeFi strategies.

Similar to Yearn Finance and Instadapp Lite, the goal of Kava Earn is to take complex DeFi features and boil them down to a simple supply-and-withdraw user experience.

The First edition of Kava Earn focuses on Binance USD (BUSD) for its reputation as one of the most stable assets in crypto.

BUSD is a stablecoin issued in partnership with Binance and Paxos and is 100% backed by reserves held in fiat cash (U.S. dollars) and U.S. Treasury bills.

With the BUSD Kava Earn strategy, it’s never been easier for users to earn with Kava — Try it out!

How Does Kava Earn Work?

The whole process on Kava Earn is super simple. Multiple messages are sent in a single transaction when users supply to a Kava Earn page.

Supplying to Kava Earn is easy.

The opposite messages are sent in a single transaction when users withdraw from Kava Earn.

Withdrawing from Kava Earn takes just a few clicks.

Users can see their positions reflected throughout the Kava platform when they supply and withdraw. When using an Earn strategy, it’s best not to update positions outside the Earn page since it can put the strategy at risk.

Kava Earn user interface.
Kava Earn provides a sleek UX for simplified high-yield DeFi strategies.

Strategies on Kava Earn are picked based on user risk and value. The goal is to provide safe strategies that return a high yield.

BUSD Earn, for example, focuses on Mint and Lend to mint USDX with BUSD, then supplies that USDX to Lend, where it earns extra incentives thanks to its status as Kava’s native stablecoin.

In the case of BUSD Earn, Mint is used to convert BUSD into USDX instead of Swap because the user maintains ownership of their BUSD and removes the risk of loss due to price changes in USDX and swap fees.

Loans on Mint are valued in USDX rather than USD to create further protection from price fluctuations in USDX.

By leveraging BUSD vs. exchanging it, users can take advantage of USDX incentives while limiting their exposure to it.

Since the price of BUSD is fixed in Mint to US$1, it would take a multi-day de-pegging of the BUSD to put the strategy at risk.

Image depicting BUSD price chart.
BUSD has demonstrated stability over a long time frame.

What’s Next for Kava Earn?

USDC and USDT are the immediate assets users can expect to be added as a Kava Earn Strategy.

Over time, Kava Governance will evaluate strategies using new protocols such as Kava Swap and other Kava Network DeFi apps.

As new strategies and assets are added, they will need to be evaluated and tested for potential risks due to liquidation or impermanent loss.

Kava Governance may vote to add new functionality to limit user risk too. User safety and user value are the primary concerns when evaluating new assets and protocols.

Kava Earn provides simple, safe earning on stablecoins.

Disclaimer: This content is provided for informational purposes only and should not be relied upon as legal, business, investment, or tax advice. You should consult your advisers as to those matters. References to any securities or digital assets are for illustrative purposes only and do not constitute an investment recommendation or offer to provide investment advisory services. Furthermore, this content is not directed at nor intended for use by any investors or prospective investors and may not under any circumstances be relied upon when making investment decisions.