To strengthen the overall safety aspect of the Platform, Kava has introduced a new community pool on the blockchain in the form of the Kava SAFU Fund. With the introduction of this new fund, the organization believes that it will protect investors’ funds against any hacking or a Black Swan event.
In addition, the protection against technical bugs or unforeseeable changes will also be provided by making the users whole after any such event. It is also worth mentioning that no such kind of event has ever taken place on the platform. However, the organization is still taking proactive measures to keep its safety and security record intact in the future. The solid architecture of the platform coupled with its new-age capabilities has now got the added boost of the SAFU Fund, thereby taking the utility of the platform to a different level altogether.
The fund’s creation will occur through the inflationary event in which 10% of the total supply of the company’s token will be minted and saved as a Fund for future contingencies. According to cryptocurrency experts, the creation of this pool will prove beneficial for the entire decentralized finance (DeFi) ecosystem. This is because investors will have the assurance that they will get their money back and not lose any of their investment in case of any enviable circumstances.
The primary motivation behind the step is the expanding reach and user base, with several investors reaching hundreds of thousands on the platform. This expansion has put the extra responsibility on the shoulders of the platform to make sure it keeps up with the faith and belief of investors in the long run. Ultimately, the disbursal of the funds in the pool generated by the organization will depend upon the community members. The token holders of the Kava will take up any proposal to disburse the funds, and then a final decision has to be taken whether the case qualifies for the reimbursement or not.
It is a significant development to enhance the faith and legitimacy of DeFi among the investors. Kava’s extra and proactive step should complement the reach and scope of DeFi by bringing more investors to the domain.