Kava Earn using BUSD stablecoin allows you to potentially get a high APY of around 35-45% with little to no risk. Read on to find out how.
Kava Earn’s DeFi products help you make the most out of BUSD with a simple, yet powerful, strategy.
Kava Lend makes it easy to leverage any asset supported by Kava Mint with this simple strategy. You will be guided through a step-by-step process in which you will deposit BUSD, fund Mint to obtain USDX, fund Lend with the USDX, and reverse the process.
For this strategy, the potential APY is between 35% – 45%, and there is very little risk involved in providing stablecoin assets to Mint. Suppliers of USDX to Lend face little to no risk.
The steps below will teach you how to quickly set up and reverse the BUSD Mint to Lend strategy.
1. Deposit BUSD (BEP-2) to Kava
To take advantage of the Kava Earn strategy, you must first obtain supported assets — Kava Currently supports BEP-2 Binance assets such as BNB, BUSD, BTCB, and XRPB.
Binance Chain uses the BEP-2 token standard, while Binance Smart Chain (BSC) uses the BEP-20 standard. The BNB token is necessary for processing transactions with both. Therefore, you’ll need to use some BNB to transact on either chain.
The BEP-2 and BEP-20 token standards are fully compatible, and users can transfer BEP-2 Assets between BSC and Binance Chain via the Trust Wallet.
To deposit assets, head to the Balances page in the Kava app.
2. Supply BUSD as Collateral to Borrow USDX
Now that you have deposited your BUSD to the Kava chain, you can use BUSD as collateral to borrow USDX at up to 99.01% Loan to Value (LTV) with Kava Mint.
What makes stablecoins special on Kava Mint is their fixed USD$1.00 peg, and users can borrow 99% of the value supplied. That means Mint users can take out loans against crypto-asset collateral at a 99.01% LTV ratio to obtain USDX without paying trade fees.
Kava Mint is designed in such a way to minimize risk for users. Stablecoins like BUSD have fixed asset prices to minimize price fluctuation risks, and it would take a multi-day de-pegging of BUSD to put a user’s position at risk.
In addition, users can obtain USDX without exposure to USDX price changes because they repay the USDX value of the loan regardless of the price of USDX.
Click here to enter Kava Mint.
3. Supply USDX to Kava Lend to Earn
When you have successfully borrowed USDX from Kava Mint, you can then supply that USDX to Kava Lend and start earning stable returns on the supplied asset.
Users can earn 35%+ APY with USDX on Lend because USDX receives extra incentives compared to most other assets for being the native stablecoin of Kava. And importantly, for USDX suppliers, there is no liquidation risk on Kava Lend.
Click here to access Kava Lend.
4. Back Out the Kava Earn Strategy
To back out of the Kava Earn strategy is simple:
- Withdraw your USDX from Lend
- Repay that USDX to Mint
- Reclaim the full amount of BUSD that you originally supplied
And that’s it! You know everything you need to use this simple yet powerful strategy to earn on Kava.
Alternatively, you can simply supply or withdraw BUSD in Kava Earn and take advantage of the strategy outlined above. Kava Earn is a new feature to simplify earning strategies powered by the Kava Network, with the first edition being the BUSD Mint to Lend strategy.
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