Categories: Editors' Picks

DeFi project Kava Incorporates Rigorous Security Measures Like Apple’s App Store

Apple often receives criticism for its stringent App Store guidelines that the company puts into place to insulate its users with the best experience. Developers…

Apple often receives criticism for its stringent App Store guidelines that the company puts into place to insulate its users with the best experience. Developers of applications have to adhere to high standards and requirements or else see their submissions rejected. A similar approach is being proposed by the developers of the Kava blockchain to the entire DeFi ecosystem of developers as well. Hard Protocol is the first app on Kava to serve as a cross-chain money market by users holding assets including Bitcoin, XRP, USDX, and others. Similarly to Apple, Kava requires the developers of applications to apply a stricter developer ecosystem where the community participates in the governance, votes on proposals, and maintains tight developer rules. For example, regular code audits are required.

The Apple Approach protects Customers

Applying to the Apple App Store is an ordeal. The terms and conditions outlined by the technology giant clearly state which types of submissions will be accepted. Apple requires a clean and right process from its developer ecosystem that leaves no room for interpretation. At the same time, rejected applications can be resubmitted if the necessary changes are made.

All of these measures are taken by Apple to protect its customers at all times. While the Apple App Store is a gatekeeper of sorts for the future of mobile app development, implementing a similar approach for decentralized finance, or DeFi, helps cull the wheat from the chaff. Through the lense developers building on the Kava blockchain, effectively enforcing such a gatekeeping process should be required for apps building the financial infrastructure for the future of banking.

The Current State of DeFi Isn’t Sustainable

The core principle of farming DeFi yields on Ethereum may not be feasible for the long run. If the goal of DeFi is to augment the effectiveness and reach of technology to best service users’ needs with financial services. More so than the industry within the industry needs to support the security and scale demands required to serve users’ needs safely. Specifically, new projects are almost incentivized to promise bigger rewards to investors compared to their competitors. A game of one-upmanship can only go well for so long before everything comes tumbling down because DeFi should be more than the incentives wars and focus on serving users with safe and secure financial services better than the banks

Source: CoinGecko

In its current state, most DeFi enthusiasts are in it for short-term gains. Being in it “for the technology or core values” is seemingly of less importance. Rather than creating more tension between those who value principles and users who want to earn more money, a new plan of action will be necessary.

Rewarding Contributors Rather Than Speculators

One possible business model comes in the form of rewarding network contributors, instead of those speculating on token prices. Anyone who performs tasks for the network – such as acting as a validator or staker – can be rewarded for their effort. This creates an incentive for those who contribute, and ensures the developers of protocols can focus on what they do best: streamlining the code.

One project exploring this model is Kava, a layer one blockchain designed to provide a foundation for DeFi developers to build cross-chain apps. Built with the Cosmos SDK, apps on Kava can also seamlessly interoperate with other Cosmos SDK chains. The first app to take advantage of Kava is called Hard Protocol. It will inherit cross-chain features as well as the robust security Kava validator nodes provide. Additionally apps on Kava like Hard Prtocol can leverage Chainlink Oracles for secure price feeds. Current liquidity providers supply assets to Hard Protocol’s money market will earn HARD, the governance token of Hard Protocol. This serves as an incentive for existing contributors to keep doing what they’ are already doing.

A Growing Focus on Security

Security is an issue for DeFi projects built on Ethereum. More specifically, there have been dozens of new projects encountering bugs, issues, or rug pulls. The code issues can be resolved by audits, yet rug pulls are clear examples of security breaches with nefarious intent. Protecting customers needs to be a bigger priority in the DeFi sector if larger financial institutions will use the technology.

From that point of view, Kava is actively maintaining an approach similar to financial institutions, forging partnerships, and working with traditional banks. More specifically, Kava’s network is represented by some of the largest financial institutions in the space. As the project continues to grow, more apps will launch, and more validators will be added to the ecosystem. As a result, the list of validators has grown rather large in recent weeks, with over 80 institutions running nodes. Every validator, voter, and staker decentralizes the network further. More decentralization will provide better security for all users.

Another aspect to keep in mind is that the code powering this DeFi project is purpose-built with a strong focus on scalability and speed. Additionally, regular audits of the code are performed to avoid any unexpected bugs along the way. These audits are another example of the growing focus on security.

This approach also extends to anyone building on top of the Kava ecosystem. Somewhat akin to the requirements enforced by Apple’s App Store, Kava will require more code audits and provide a safer environment to users. Moreover, the code of any new application, product, or services will be scrutinized during an audit to create a safe environment for users of DeFi products and services.

Closing Thoughts

The DeFi landscape has grown significantly, yet still has specific issues to overcome. Kava’s launch of money market Hard Protocol will confirm if the team’s approach to decentralized finance can pay off. It is a native blockchain, rather than a project running on Ethereum. That makes it different from a lot of current “top” DeFi ventures on the market today because similar to Ethereum any token can build and launch their own projects as applications on Kava.

Providing an alternative to Ethereum’s decentralized finance ecosystem can yield telling results.. KAVA is still relatively new and it isn’t well known. The project isn’t listed on DeFi Pulse and isn’t yet available on Coinbase. However, it’s anticipated to list soon. Few have heard of the KAVA project, considering how much money is currently locked up in DeFi.

Andrey Sergeenkov

Cryptocurrency investor and trader. As an independent journalist, he covers DeFi, crypto, blockchain, and crowdfunding.

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