A $0.95 "USD stablecoin"
Kava Network's native stablecoin, USDX, depegged over a year ago in September 2021, and has never repegged since; hovering around $0.95-$0.99 for the entire period. The data appears to backed up by both CoinGecko and CoinMarketCap.
USDX, launched in November 2020, depegged by over $0.20 until June 2021, then repegged to $1 for three months until September, where it has remained depegged since. While it is not a significant depeg, it still fails the definition of a stablecoin.
In May, during the height of the Terra crisis, USDX dropped to $0.65 after it was revealed that Kava Labs used the now-dead UST stablecoin as one of the few cryptocurrencies to back USDX. After removing UST as a collateral, Kava Labs CEO Scott Stuart stated that USDX would repeg. While it has since risen to $0.96 at the time of writing this, it has failed to repeg to $1, despite it being a non-algorithmic stablecoin and backed by other crypto assets such as Cosmos, Wrapped Bitcoin, Kava, and Ethereum.
Kava is a blockchain focused on interoperability and smart contracts. It utilizes a two-chain infrastructure built on one network, which combines the programmability of Ethereum Solidity smart contracts and the Cosmos SDK, featuring the Tendermint consensus protocol. It's worth noting that the embattled Terra is also a Cosmos-based blockchain.
Kava Network's future
The network has recently launched a $750 million developer incentive program, stating:
"The Kava DAO has voted to allocate $750M to on-chain developer incentives, committing majority ownership of the network to the #BUIDLers. High-quality developers are the most valuable asset to the long-term success of Layer-1 blockchains. In recognition of this, Kava has implemented Kava Rise: a $750M incentive program designed specifically to continue onboarding the most innovative developers across the DeFi, GameFi, and NFT verticals to the Kava Network."
$750 million is a massive sum and given USDX, which is seen as the most important part of the ecosystem, has failed to maintain its peg for over a year, there may be future problems for the network down the line.