2021 started on a firm footing. Record prices across most coins and altcoins, and now we have DeFi.
Most know Ethereum dominates, but there are better, cheaper, and interoperable alternatives. Regarding cross-chain DeFi, analysts are confident, explaining the bullish Kava price prediction for 2021.
A simple look at Defi Pulse, a website that tracks the number of assets managed by different Ethereum-based open finance protocols, reveals the cumulative TVL is upwards of $40 billion.
But here’s a caveat: Ethereum DeFi, as the name suggests, only serves Ethereum tokens. As the most dominant, there are bridges, projects are bridging to the platform. The problem is, with each connection from a non-smart contracting platform, weaknesses emerge.
Still, things can be done differently. And this is what the Kava Protocol mastered in 2020, gaining a massive user base. Accordingly, many analysts continue to churn out optimistic Kava price forecasts for 2021.
Why KAVA Price and Protocol Was Successful in 2020
The Kava protocol is more like Ethereum, but its original objective is to facilitate cross-chain DeFi.
The marked difference in this arrangement is the middle man’s absence (positive) and, most importantly, access to liquidity and drastically lower fees.
By transacting in the Kava protocol, users directly deposit supported tokens outside of ERC-20 tokens as an example, without tokenizing their stash, to access loans, and to secondly, lend out their funds.
Kava aspires to operate like a decentralized bank serving the cross-chain space with superior products, including loans, lending services, and interest-bearing loans.
The difference with other protocols is that users can borrow loans in USDX, swap for more tokens, or even lend them out via different Kava protocol products. What this means is that users create synthetic leverage while concurrently hedging against risks. Lending out the USDX stablecoin earns the lender 4.5 percent APY.
However, it doesn’t end there.
Since the protocol is still trying to find its footing and dominate cross-chain DeFi, there is an incentive program for USDX borrowers. Users who deposit their assets, taking out loans, will receive a portion of the over $90 million in KAVA distributed in the next four years.
By mid-February 2021, over $21 million had been distributed to lenders, while the cross-chain DeFi protocol locks more than $211 million in TVL.
Compared to Ethereum DeFi, which locks $40 billion, it is clear that there is an under-valuation, a market inefficiency that savvy traders will soon fill.
The Hard Protocol: A Cross-Chain Money Market
A look at the coins supported by the Kava protocol leads to HARD.
This governance token is the first native to the smart contracting enabled Cosmos SDK-built platform. It powers the Hard Protocol and part of what turbocharged the KAVA price and branding in 2020.
The Hard Protocol describes itself as the world’s first cross-chain money market. The first phase of the project supporting the supply-side with liquidity mining of HARD began in October 2020.
Altogether the platform utilizes the Kava protocol’s security, interoperability, and Chainlink oracle for price feeds.
There is a slight difference between the Hard and Kava protocols. Through the Hard protocol, users will eventually lend, earn, and borrow with assets like BTC, XRP, BNB, BUSD, KAVA, LINK, and USDX.
The second phase will be activated at a tentative time in 2021, enabling full functionality and liquidity mining of the 80 million HARD tokens.
Herein, it is clear that the Kava Protocol wants to create an ecosystem where users can lend and borrow, earn KAVA tokens that can be supplied to the Hard Protocol, earning interest while minting HARD governance tokens that can also be cycled back to the Kava Protocol.
Borrowers can also channel their USDX, supplying them to the Hard Protocol, earn interest besides KAVA and HARD tokens.
The activation of the second and final version of the Hard Protocol will mark the end of Kava 5. In subsequent phases, Kava 6 introduces Autonomous Market Making (AMM) service. Kava 7 rolls out a Robo Advisor app for automation to automate trading strategies.
A Brief Rundown of the Kava Protocol
The Kava protocol is a creation of Kava Labs. Aforementioned, their overarching objective is to introduce DeFi, yield farming, and more to holders of non-Ethereum assets.
By mid-February 2020, the Kava protocol locked more than $200 million of assets allowing Bitcoin, BNB, and XRP token holders to participate and earn superior DeFi yields without tokenizing their assets.
The Kava protocol takes after MakerDAO, leveraging on Cosmos interoperability and speed for superior scalability. It results in a low fee environment, instantaneous settlement, and an interlinked ecosystem, benefiting KAVA holders.
Their CDPs mints loans in USDX, a stablecoin similar to DAI, that’s pegged to the USD. Like the MKR in MakerDAO, KAVA is the token of the last resort just in case there is a protocol destabilization resulting in liquidation.
We must also note that the Kava Protocol is backed by heavyweights, including Binance, Huobi, and OKEx, supporting the KAVA trading.
During their IEO conducted on the Binance Launchpad, they receive investment from Arrington XRP Capital—whose portfolio comprises BlockFi, Paraswap, Chai, Algorand, and more. The founder, Michael Arrington, is a serial investor and support of XRP that the Kava Protocol supports.
Kava version 3 will go live in 2021.
After that, the platform plans to support AMMs like Uniswap and Robo Advisors like Yearn Finance.
KAVA Price Prediction for 2021
Cross-chain DeFi is under-explored. Many are watching from the sidelines, waiting to jump in and earn high yields from their investments.
The Kava Protocol provides an avenue for this shift, a net positive for the KAVA/USD pair, and a reason for solid KAVA price prediction for 2021.
According to DigitalCoin, the KAVA/USD price will reach $10 by the end of 2021, based on their trading algorithms. This is a 1,000 percent increment considering KAVA was trading at around $1 in mid-December 2020. The site adds that holding KAVA is an excellent long-term investment.
YouTube KAVA Price Prediction for 2021
From algorithms to YouTube analysts, traders are bullish.
Ivan Kv, for instance, says the coin can reach $10 by the end of 2021. He mentions their value proposition, backing from high-profile investors, and the quality of the team. Brian Kerr is from Silicon Valley, a fact that adds incredibility to the project.
BitBoy, a crypto analyst, thinks Kava Protocol is undervalued and can be the next big thing. He opines that the Kava protocol has a real accessible team:
KAVA Price Forecasts for 2021 on Twitter
With DeFi growing in popularity, Ethereum is pulled down by high Gas fees. A Twitter user predicts the KAVA price to hit $8 by the end of the year as it offers a way out of the Gas problem:
Its been pumping hard, but now it is about to finish a Cup & Handle pattern that has been developing since August 2020.
Price target is $8.79 (100% gain) pic.twitter.com/tZixhq3HJb
— Abelito (@AbelitoPanama) February 11, 2021
Another says that with BNB adding over 5X, the KAVA price is open to $150 by the close of the year:
— Blago Nadinka (@BlagoBTC) January 11, 2021
Based on trends, another DeFi fan predicted the KAVA price to test $50 in 2021:
Some price predictions ( for entertainment purposes only not financial advice) for end of 2020 leading into 2021:$XRP $100$VET $0.35$AAVE $10$DOT $100$BAND $100$KAVA $50#XRP #xrpthestandard #xrparmy #VeChain #VeFam #Aave #DOT #Polkadot #Polkadotproject #BAND #Kava
— BarriC Ⓥ (@B_arri_C) August 27, 2020
Kava needs to capture a small portion of DeFi, one Twitter user says. He adds that the KAVA price could reach $100 in 2021:
One of the best Defi coin in market. This coin will cross +100 USD price per coin in 2021 🚀🌙🔭🔥🔥🔥
— 🇨🇦 Sunil Kapadia 🇨🇦 (@sunilkaps) August 5, 2020
Will the KAVA Price Rally in 2021 with Rising DeFi Popularity?
From $10 to $150, it is evident that traders across the board are confident, explaining their bullish KAVA predictions for 2021.
The question remains: Will 2021 be the year of Cross-Chain DeFi? The answer to this is varied. However, DeFi is gaining traction. More want to make extra revenue. However, they prefer doing this in a scalable, low-fees environment via a platform that supports more coins outside of Ethereum.
The Kava Protocol is backed by heavyweights like the Arrington XRP Capital—a serial investor in DeFi projects. It also has partnerships with Chainlink as well as Binance.
As the Kava protocol continues to develop, adding more features and products while incentivizing users, the platform carves out the multi-billion DeFi sub-sector market share.
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