Terra Competitor Kava Expands DeFi With $185M Fund
Kava Labs plans to grow its DeFi ecosystem with a new Ignition Fund.
Key Takeaways
- Kava Labs has created a new Ignition Fund of $185 million to finance new DeFi protocols.
- Several DeFi projects will be financed to build on top of Kava, the core team announced.
- Assets under management (AUM) on the Kava network has increased to over $2 billion recently.
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Kava Labs has allocated a $185 million Ignition Fund to spur the growth of its DeFi ecosystem.
Kava, a blockchain for cross-chain DeFi, will benefit from $185 million towards a crypto start-up accelerator called the Ignition Fund.
Kava Labs Announces Ignition Fund
On Tuesday, Kava Labs announced a new Ignition Fund to finance new DeFi protocols on the platform. The $185 million fund aims to accelerate carefully vetted projects to build on top of Kava.
The team said that selected projects will benefit from the network’s growing ecosystem and “institutional-grade security.”
Speaking about the objective of the Ignition Fund, Scott Stuart, CEO of Kava Labs, said:
“There’s a massive opportunity in DeFi right now to be the first to bridge the gap between the early adopters and the untapped mainstream. The Ignition Fund is about getting Kava there first.”
Kava, a Cosmos SDK-based smart contracts network, acts like a liquidity hub for cross-chain decentralized finance (DeFi) services. It is one of the top blockchains in the Cosmos ecosystem alongside projects such as Terra, Thorchain, AkashNet, Secret Network, IrisNet, and others.
Currently, Kava hosts a range of dApps such as the decentralized money market Hard Protocol, automated market maker KavaSwap, and a native decentralized stablecoin called USDX. Non-native assets such as Binance Coin have also been tokenized on Kava, and USDC and ETH deposits are coming shortly.
Just last week, assets under management (AUM) on the Kava network has increased to over $2 billion, thanks to the recent release of KavaSwap, a DEX that rewards users for providing liquidity. By financing new projects, the Ignition Fund may help further boost this statistic.
In the Cosmos ecosystem, Terra, another DeFi-centric blockchain, is a close competitor of Kava and hosts well-known projects like Anchor Protocol, Mirror Protocol, and the UST stablecoin. The difference between the two is that Terra is considered more of a stablecoin-focused blockchain. Nevertheless, both chains are aiming to foster a complete DeFi ecosystem in the future.
It is possible that rather than competing with one another, the two chains will eventually complement each other. Both Kava and Terra are based on the Cosmos SDK, meaning they will be interoperable with one another and the broader Cosmos ecosystem via the Cosmos IBC.
Once Cosmos SDK projects are connected with Cosmos IBC, a feature tentatively planned in Q4, it can lead to a mutually beneficial interplay between the two networks.
Disclosure: At the time of writing, this author did not own any token mentioned in the article.
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