Institutions can now earn as high as 45% APR on their Bitcoin investments without zero counterparty risk on Kava. This is following several updates to Kava’s baselayer as well as several other performance enhancements expected to go live as a result of the Kava 5.1 upgrade.
According to a press release shared with Altcoin Buzz, the multi-asset DeFi platform has garnered support from top players in the cryptocurrency space, including Binance. The crypto exchange on Twitter announced support for the Kava 5.1 network upgrade and its proposed hard fork.
— Binance (@binance) April 8, 2021
Rise in Institutional Interest in BTC
In a nutshell, the world’s foremost cryptocurrency, Bitcoin, has solved one of the most pressing issues of mankind (funds autonomy). Bitcoin provides users with total control of their funds, completely eliminating the need for any form of intermediate institutions like banks. The Kava Network 5.1 upgrade has a major interest in institutional-grade BTC investors. This is an important upgrade as institutional interest in Bitcoin has been on the rise in recent times. Companies like MicroStrategy and Tesla are at the forefront of institutional-grade investment in Bitcoin. Also, more companies now own a Bitcoin treasury with major parts of their reserve stored as BTC. Following the Kava 5.1 upgrade, institutions will be able to obtain loans on their BTC assets.
It is a well-known fact that Bitcoin, like all other altcoins in the crypto space, suffers from unprecedented price fluctuations. This price volatility results in institutions investing in Bitcoin having to make certain important choices. Choices such as when to sell or when to purchase more Bitcoin. Finding out this “retention” angle is crucial if the cryptocurrency space is to attain global adoption, especially among institutions.
While Bitcoin is a wonderful innovation, obtaining new and important use cases is necessary to keep it relevant. One of such use cases is introducing institutional-grade borrowing.
This is one option that holds great appeal to institutional-grade Bitcoin investors. This option is also a strong way to drive the number of institutional-grade investors through the roof. The Kava Network 5.1 upgrade comes alongside the HARD Protocol Version 2 upgrade. The HARD Protocol upgrade will make it possible for investors to borrow funds against their assets. The funds borrowed come at various interest rates, with both borrowers and suppliers earning HARD tokens.
Kava, simply put, provides institutions with the ability to earn interest on their BTC holdings. For example, Tesla can earn up to 21,600 BTC if it locks up its estimated BTC holdings of 48,000 BTC for one year due to Kava’s 45% APR.
While Kava is one of the first Bitcoin-based DeFi solutions, we expect more of such solutions to spring up in the near future. Institutional interest in the crypto space, Bitcoin in particular, is important because it is a viable way of facilitating global adoption and acceptance of this truly amazing innovation.
Brian Kerr, CEO of Kava Labs, supports this opinion. He added that as more institutions adopt Bitcoin, “the more valuable the Kava DeFi platform will become.”
At the time of publication, KAVA was trading at $7.42, with a market cap of $434,308,327 and a 24-hour trading volume of $125,412,835.
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Find out more about the DeFi space and other DeFi updates on the Altcoin Buzz YouTube channel.