Frax to deploy on Kava EVM co-chain to earn rewards

Governance Proposals Miscellaneous
1

Hi there,

This is Tommy from the Kava BD team here.

This proposal is for Frax to buiild on Kava’s new Ethereum co-chain launching in early May to earn a share of the 200M Kava ($800M USD) reward to be distributed over 4 years.

You can see more details of the incentive program here.

Essentially the 200M Kava will be distributed proportionally based on the amount of TVL brought over from Frax.

As a significant partner, and early mover, if Frax were to deploy on Kava and earn (as a example) 20% of the rewards, that would amount to 40M Kava, or over $160M USD to it’s treasury over the next 4 years. Long term project alignment between Frax and Kava.

Curious to hear what the community thinks!

3

To be clear, the proposal is for Frax to deploy on the Kava EVM co-chain

Summary

Deploy Frax pool (Frax + USDC) to Kava testnet and mainnet.

Motivation

Kava is a IBC-enabled blockchain, currently with over $600m in TVL, and with a market cap of over $730m. In May the Kava team will launch a new EVM compatible blockchain, utilizing the same validators as the IBC-enabled chain. As a part of this new EVM-compatible chain, Kava has two programs to incentivize protocol deployments. Frax stands to gain from a deployment by acquiring:

  • Our pro-rata share of 100k Kava incentives if Frax deploys before mainnet launch as a part of Kava’s Pioneer Program, and
  • Our pro-rata share of the $750m developer fund paid out to the top 100 protocols by TVL over 4 years as a part of the Kava Rise program.

Discussions with the Kava team have informed us that there are currently no other algo stable providers planning to deploy to Kava. This provides a unique asymmetric opportunity for Frax to attract new liquidity with little risk.

As an example, if Frax were able to supply 20% of the TVL on the new Kava EVM co-chain, we would earn 40M Kava or $160M+ USD at current market prices, for which we could provide those rewards back to our community and users.

Specification

Deploy Frax to Kava testnet and mainnet initially with pool (Frax + USDC) using the Kava incentives from both the Pioneer and Rise programs to incentivize liquidity.

4

Very interesting. Will let others who know the IBC space better comment, but I’m all for taking advantage of new chains that have significant backing to support them and be an extractor of resources.

5

if your paying out $800m in KAVA, wont people just sell it and the price will dump?

or is there something in place for staking / locking up the KAVA thats attractive to FRAX protocol and other investors / farmers?

6

Yes, there is 100% staking/locking up the Kava.

Another 120M Kava will be rewarded to validators/stakers over the 4 year span as well, incentivizing lock up of the distributed Kava :slight_smile:

We also have some other plans in the works to additionally reward stakers!