Frequently Asked Questions

In this section, we will address some of the most common questions related to the Kawa Protocol, providing users with clear and concise answers.

Can you borrow across multiple chains if your collateral is locked on one chain, i.e., can you fractionalize across chains where you borrow?

Yes, users can borrow assets across multiple blockchains up to their maximum borrowing capacity. For example, assuming an LTV of 60%, locking 10 $ETH on Ethereum permits a user to borrow a maximum of 6 $ETH across the chains of their choice, such as 3 $ETH on Optimism, and 3 $ETH on Sei. Kawa will launch with initial deployments on Sei and Ethereum, with expansion to Optimism, Polygon, BNB, and other Layer 2 and EVM compatible blockchains.

Is Kawa planning on doing all liquidations, or will you enable users to conduct them as well?

Liquidations will be both available to the protocol and sophisticated users. If you would like to read more about this, please read the Liquidation Process section above.

What happens if Axelar and Wormhole go down simultaneously? How would you then obtain consensus?

If the XCM Aggregator was using 4+ bridges, with a minimum quorum of 2, then the protocol would continue to operate as normal. In the extremely unlikely event that enough bridges stop responding simultaneously, the XCM aggregator will not form consensus and won’t update a state. This will temporarily disrupt liquidations, but users’ funds will be safe. How do you correct liquidity mismatches if borrowing/lending traffic is all going one-way?

As utilization of any particular asset goes up, the APR curve should sufficiently incentivize users to go the other way. You can read more about this in the Interest Rate Model section.

Is the ledger state shared across all blockchains or is it centralized to Sei?

The main ledger (Kawa Core) is held on Sei; all balance updates have to route via this. Kawa Ports deployed on other chains are stateless.

How long does it take to be able to use my collateral after depositing on Ethereum?

The largest amount of time spent is with Ethereum finality. Once that has passed, the instant finality of Sei will enable you to borrow assets on any other chain. This is another reason why an instant finality chain like Sei is ideal for Kawa’s design.

Why did you pick Sei and not EVM?

The instant finality of the Sei Blockchain makes it an ideal environment for Kawa versus EVM-based blockchains. To read more, see the Why Sei? section for more details.

How is the portfolio set up?

Wallets on different chains become linked contractually, so the UI will be able to show you the balances on whichever wallet you are logged in with.

Where do I stake my Kawa tokens?

$KAWA is a Sei native token, and staking/liquidity mining and governance will take place on Sei through the Kawa.finance dapp.