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‘Apple Store of DeFi’ Is Bringing Yield Farming to Bitcoin, XRP

In brief

  • Harvest.io is Kava’s new automated money market protocol.
  • It’s a little like Aave and Compound, only on Kava, designed to support assets beyond just Ethereum, such as Bitcoin and XRP.
  • Kava aims to make decentralized finance as safe and easy to use as apps on the Apple Store.

The cofounder of Kava, a blockchain network focused on interoperability, wants to bring the trimmed haircuts, tucked in t-shirts, and “it just works” attitude of your local Apple Store to the world of decentralized finance

With the launch of one of its first DeFi protocols, automated money market Harvest.io, Kava cofounder Brian Kerr hopes to bring order to the chaos of the DeFi market, as well as support for Bitcoin, Ripple’s XRP, and other assets besides just Ethereum.

DeFi refers to a slew of non-custodial financial products, most notably decentralized lending protocols, decentralized exchanges and synthetic assets. At the moment, Ethereum dominates the DeFi market; there’s about $9.7 billion worth of cryptocurrency locked up in DeFi smart contracts, and all of it’s in Ethereum-based protocols. Kava, built on “blockchain of blockchains” platform Cosmos, is one of several blockchains seeking to diversify DeFi beyond Ethereum.

Kava announced Harvest.io on Monday and will launch the product on October 15. Harvest.io supports crypto loans and investments in liquidity pools—pools of money that ensure loans always have counterparties. It also rewards those that use the protocol with a governance token, HARD, which stands for HARvest Decentralized. (Governance tokens are cryptocurrencies that holders can use to vote on proposals to upgrade the network, or sell on secondary markets).

Harvest.io appears very similar to Compound and Aave, two decentralized lending protocols housed on Ethereum, only Harvest.io supports Bitcoin and XRP, as well as Binance’s BNB and BUSD. In comparison, Ethereum supports synthetic, Ethereum-based representations of coins native to other chains, such as Bitcoin, through projects like tBTC, renBTC and wBTC, but not the coins themselves. 

But Harvest.io’s silver bullet is its permissioned blockchain, Kerr tells Decrypt. Each application on Kava has been rubber-stamped with the approval of the community. Though many of the major Ethereum protocols have been audited and vetted by the community, Ethereum houses many dangerous and volatile decentralized finance protocols, whose creators can scam investors out of lots of money or lose their users’ fortunes through poorly-written code. 

“We want to make sure, kind of like Apple does when they check applications for new apps in their app store, that they’re of quality and meet certain standards. We’re just doing the same,” said Kerr. Those operating nodes on Kava include some of the world’s largest crypto exchanges, such as Binance, OKEx and Huobi. 

From within this bulletproof glass box, Harvest.io’s users can watch the unwashed, savage swarms of DeFi degens rip open stomachs with the jagged edges of broken protocols and scoop out the entrails of their compatriots—dinner. 

“That’s something that we’re trying to avoid,” said Kerr. 

Kerr said that this “decentralized but curated approach” will prevent the community from running riot on the blockchain, and stop people from “from spamming the network with CryptoKitties and other things that take up blockchain bandwidth.”

Kerr also thinks that people may use Harvest.io as, at least for now, it promises to be cheaper to use than Ethereum analogues. “Fees are just nonexistent on Kava, and they’re almost prohibitive in the Ethereum ecosystem unless you have $100,000s to play with…when something costs $90 to just open a position or to lend, that might be 10% of their capital,” he said. 

In addition, Kerr said it’ll be easier to use. While Ethereum’s DeFi offering still baffles most users (by their own admission) due to its high level of difficulty, Kava, and by extension Harvest.io, is among the first to integrate with major exchanges, meaning “it’ll be a very nice experience for those users.”

Harvest.io will eventually decentralize. To put control in the hands of the community, the team have implemented yield farming—the practice of earning governance tokens by using the platform—in Harvest.io. The team will issue 40% of the token’s 200 million supply to users, and a further 20% to those that stake Kava.

When it launches on October 15, it will support deposits of BTC, BNB, HARD and USDX, a US dollar-pegged stablecoin. On December 20, Harvest will launch Harvest v2. This will add support for Chainlink, the coin that powers the eponymous decentralized oracle. It’s one of the most popular DeFi coins, with a market cap of $3.2 billion.

Disclaimer

The views and opinions expressed by the author are for informational purposes only and do not constitute financial, investment, or other advice.

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