What does KAVA coin do?

KAVA operates on a unique mechanism that allows cryptocurrency holders to leverage their assets for borrowing purposes. At its core, KAVA facilitates the borrowing of USDX, a stablecoin designed to maintain a fixed value relative to the US Dollar.

To access this service, users must first lock their crypto assets within specific smart contracts. These smart contracts serve as a form of collateral, ensuring that the borrowed USDX remains stable and secure.

The amount of collateral required is directly proportional to the amount of USDX that can be borrowed. This system ensures that the value of USDX is maintained over time, as the underlying collateral provides a safety net against potential market fluctuations.

To initiate the borrowing process, users must connect their crypto wallet to KAVA. This step is crucial as it allows KAVA to verify the user's assets and process the transaction seamlessly.

Once connected, users can select the amount of USDX they wish to borrow and the corresponding crypto assets they wish to use as collateral. The smart contract automatically calculates the necessary collateral amount and locks it in place.