Katasuke and the other Hidden Leaf scientists were able to take some of Naruto's DNA when they were growing him a new arm with Hashirama's cells.
Sometime in the future they were able to take Sasuke's DNA.
They did this to create the most powerful human ever as Naruto & Sasuke are currently the most powerful chakra-users known so far and most accessible to the scientists.
Therefore Kawaki is a synthetic human
They may have also been jealous of Orochimaru's synthetic human, Mitsuki, so they wanted to prove that they were better
The unknown 3rd Otsutsuki granted Kawaki his power resulting in him getting the marks/sigils on his arm just like Momoshiki granted Boruto his marks/sigils
Boruto most likely met him after the Chunnin Exams and became friends with him
Unfortunately Kawaki gained a mind of his own and as a result of how he percieved the shinobi life, he wanted to end the era of shinobi as he didn't like it
He is highly likely to be a new character and not Iwabe or any other people that other theories suggest
He may also have his Senju hairstyle as a result of them maybe adding Hashirama's cells in to the mix, possibly allowing Kawaki to use Wood Release
P.S Tsunade's younger brother was called Nawaki Senju
Therefore we can expect Kawaki to be a worthy opponent for Boruto and it will be a battle as Naruto vs Pain or Naruto & Sasuke vs Kaguya if not better