Kava, a cross-chain project for decentralized finance (DeFi), announced that it has implemented an innovative system of governance.
Kava aims to drive innovation and lead the DeFi industry on all fronts. Kava is implementing a new innovation called “committees” for its on-chain governance process to improve the platform’s resiliency in times of fast-moving volatile markets. https://t.co/Siv63L1PgF pic.twitter.com/iZ4qmISu1L
— Kava Labs (@kava_labs) May 13, 2020
In the report, Kava analyzed the recent incidents involving the DeFi sector, mentioning of course MakerDao, the famous crypto crash and pointing out that in times of crisis other systems and protocols are also affected, for example the stablecoin DAI.
Stability committees for the governance of Kava
For its part, Kava, although its system of governance is completely onchain, has not been fast enough to counteract the high volatility and that is why the decision was taken to introduce an innovative system of governance with “Stability Committees” that will have the task of making the platform resilient in times of market volatility.
Some groups of people chosen will have privileges and the possibility to take decisions in order to speed up the voting process: in fact, in these times of crisis, it is better to take a quick decision rather than wait for a long vote that may not bring the desired benefits.
Some of the parameters that these privileged users will be able to decide for themselves will be the collateral debt rate, the interest rate, the saving rate and so on. To do so, 5 leading organizations in the Kava ecosystem will be chosen, but these can be changed or increased in the future.
There will be 3 criteria to choose the members of this committee:
- Holding a huge amount of KAVA with a long-term vision;
- Understanding Kava’s architecture, financial markets and incentives;.
- Knowledge of Kava’s history and active participation in the system.
There are already nominations and these are Kava Labs, Chainlayer.io, SkakeWith.Us, Framework Ventures and Cosmonation.
Those who hold Kava tokens will be able to vote for the selection of these members of the Committee. The current results can be seen here.