Kava stands out among other DeFi solutions thanks to its focus on cross-chain liquidity involving major assets such as Bitcoin and BNB.
Kava is paving the way for broader DeFi adoption by major institutions. Through its recent protocol upgrade, institutions will earn over 45% APY on Bitcoin holdings at no counterparty risk. This upgrade will bring a lot of attention to this ecosystem and the broader decentralized finance industry.
Institutional Investors Favor Bitcoin
People or institutions who enter the DeFi space will often look for the highest APY through yield farming, providing liquidity, or otherwise. However, it can be challenging to find the correct solution that will offer these high returns over an extensive period. As more and more companies begin setting up a Bitcoin treasury, they will begin to look for new solutions to put those assets to work. Exploring opportunities in the DeFi space can prove lucrative, assuming there is a reliable return rate to appeal to these users’ needs.
At its core, decentralized finance allows users to control their funds and put them to good use to earn interest. Using centralized finance has become less appealing, primarily because of low to negative interest rates. For institutional investors, a new solution needs to be found. As they flock to Bitcoin more actively, now is a good time to provide DeFi solutions for BTC holders.
Even though Bitcoin remains a rather volatile asset, it is the aspect that attracts a lot of institutional interest. Price fluctuations can prove profitable, assuming one purchases BTC at the lowest price possible. None of the companies setting up a Bitcoin Treasury has lost value so far, confirming the world’s leading cryptocurrency’s strong position.
Kava’s Appealing 45% APY
Kava stands out among other DeFi solutions thanks to its focus on cross-chain liquidity involving major assets such as Bitcoin and BNB. Through its continual protocol upgrades, the team has introduced new features, benefits, and a higher APY. This APY will now begin to appeal to institutional clients, as they can earn up to 45% per year.
The recent Kava 5 upgrade introduces institutional-grade borrowing, providing Bitcoin holders an option to earn lucrative returns. For companies such as Tesla, that hold significant amounts of Bitcoin, an APY of 45% is difficult to ignore. Through Kava, Tesla could earn up to 21,600 BTC on their 48,000 BTC holdings over 12 months. At the current prices, that represents an APY of $1.231 billion.
Institutional users can claim their reward in HARD tokens via the HARD Money Market to earn this high APY. Two options are available: withdrawing the coins immediately for an APY of roughly 15% or waiting one year and getting three times the return. These returns are possible thanks to the lending and borrowing solutions provided by Kava across its platform. Considering how this 45% is achievable at no counterparty risk, it creates a compelling argument for all institutions that hold Bitcoin today.
As the first generation of decentralized finance provides use cases for consumers and crypto enthusiasts, the second-gen ecosystems will go one step further. Catering to the needs of institutional clients will require proper infrastructure to reel them in. A high APY of up to 45% and more will certainly turn a few heads, even if it means waiting 12 months to maximize returns.
Kava’s multi-asset DeFi platform continues to grow and evolve through continual upgrades every three months. Providing more functionality to users who hold prominent assets such as Bitcoin will catalyze broader adoption of decentralized finance.
Founder and editor at BTC PEERS. Andrey writes about financial experiments, DeFi, cryptocurrency, and blockchain.