The year 2020 has given rise to many first-gen DeFi projects catering to Ethereum users. This year and beyond, multi-chain support will become the new normal. Huobi Global is the next major exchange to incorporate Kava's technology into its platform.
Huobi Global and the KAVA asset go back to November of 2020, when the asset became tradeable on the exchange for the first time. It is pertinent for exchanges and trading platforms to provide users with access to up-and-coming currencies as early as possible. To further deepen the relationship between both parties, Huobi Global is now taking a closer look at Kava's technology.
Doing so will create new use cases for Huobi's assets, including HBTC, HUSD, and HT. Linking these tokens to Kava's DeFi infrastructure will create new use cases for collateralization to mint USDX, the native stablecoin of Kava's ecosystem. Additionally, the integration by Huobi will give HBTC holders a chance to experiment with lending and borrowing services via Hard Protocol Money Markets, a product developed by the Kava team.
This announcement is a logical extension of the recently launched Huobi DeFi Labs. Through this venture, the team wants to bring decentralized finance opportunities to the millions of Huobi platform users. Partnering with reliable DeFi projects and incorporating their features provides new opportunities and creates a competitive edge against other exchanges.
Contrary to one-tick DeFi ponies focused on Ethereum, Kava intends to tap into the liquidity residing on the Bitcoin network. It is the most valuable collateral asset to take decentralized finance into the mainstream. Custodied BTC projects, such as HBTC, can serve as crucial building blocks in this process. As leading crypto exchanges - such as Huobi - hold the largest Bitcoin reserves on the market, there is a tremendous market potential for DeFi solutions being integrated into these trading platforms directly.
What The Partnership Entails
Following this integration, users will be able to mint and burn HBTC on Kava. This process requires approval by KAVA holders who govern the protocol and all of its operations. Using HBTC as collateral for USDX loans and supplying it to the HARD Protocol Money markets will become possible. At a later stage, HT and HUSD are likely to receive native support on Kava's protocol.
Furthermore, Huobi commits to plugging in Kava's API into its main trading site. Doing so is beneficial to all Huobi users who want to access this range of DeFi apps and services directly within the exchange's ecosystem. It is a similar approach to what Binance did several months ago, which helped bring Kava to the forefront of the DeFi industry.
As has become customary in the DeFi industry, Huobi users will be able to engage in liquidity mining via the HARD Money Market. As such, users can experiment with earning yield on HBTC through this service and the Kava lending protocol and minting USDX. Providing a customizable experience to the user will help empower them.
The Rise of DeFi on Cosmos
Kava is one of the projects leveraging the native technology of the Cosmos ecosystem. However, it was the first DeFi project to use Cosmos' SDK framework and its composable environments. As the Inter Blockchain Connection technology [IBC] is bound to go live soon, it will connect Kava with all other blockchains using this technology.
As it stands, there are over 200 projects making use of Cosmos' technology. Allowing these projects to achieve composability will expand the reach of Kava as a DeFi solution and elevate the Cosmos ecosystem to a new level. The time has come for siloed projects to give away to inter-connected solutions, empowering users through financial freedom.