Kusama is a testing network of Polkadot, designed to experiment and perfect the interoperability, scalability, and other functionalities before deploying them on the Polkadot network.
The platform uses the same code base and the same structure, but works far more efficiently than Polkadot. Blockchain businesses can bid in the parachain auction to win a slot on the network. However, being in the testing stage, developers and projects building on Kusama are warned to “expect chaos.”
In this blog post, we will talk more about Kusama and the reasons why we are so bullish on its native token, KSM.
Parachains and Parathreads
1) Parachains in Kusama are parallelizable chains. In simple terms, they are simplified blockchains that are connected to a central Relay chain. The Relay chain includes validators who validate transactions and blocks to secure the network. It also has collators that are responsible for creating blocks and recording all the information of a parachain. Projects can acquire these parachains through an auction process by locking KSM tokens.
2) Parathreads are different from parachain, for they allow users to participate in the network’s security only. Anyone can get hold of parathreads for a fixed registration fee. It is expected that parathreads will be cheaper than parachains.
How Does Kusama Work?
3) Nominated Proof-of-Stake: Kusama initially started with a centralized Proof-of-Authority (PoA) consensus. However, with the introduction of Genesis governance, Kusama transformed into a decentralized Proof-of-Stake work. The network later changed its consensus mechanism to Nominated Proof-of-Stake (NPoS). In NPoS, KSM holders can nominate up to 16 validators. These validators participate in the network’s consensus in exchange for rewards. This reward is later proportionally distributed to the nominators.
4) Governance: The governance system of Kusama is a tricameral model. It comprises the legislative (referendum) chamber, a council, and the technical committee. The Legislation chamber is responsible for approving any changes or updates to Kusama’s logic. The council members are chosen by token holders, while the technical committee is created by the teams which have successfully deployed their projects on Kusama. Once the network launches, the platform will also include the Oracle Committee and the Spontaneous Subject Committee.
5) Innovative Team: Gavin Wood, the former co-founder of the Ethereum network, is the man behind the Kusama network. He is joined by the team of Polkadot, including Peter Czaban, and Robert Habermeier. The platform is built using the latest tech from Web3.0 Foundation and Parity technologies.
6) Scalable and Interoperable: Kusama uses sharding, meaning the blockchain is divided into smaller chunks (shards). Along with this, the network uses open governance. Altogether, these features provide a scalable and future-proof infrastructure to protocols building on top of Kusama. Moreover, it brings several blockchains into a single sharded platform, freeing users to utilize an interoperable network.
7) Customization: Kusama uses Substrate, which inherently comes with everything a developer needs to build logic. Using Substrate, projects can develop their protocol-specific blockchain and connect it to Kusama’s ecosystem.
8) Relay is the central chain that is connected with all the parachains to provide the shared security of the Kusama network. All validators of Kusama stake their KSM tokens on this chain to validate transactions and secure the network. Though the Relay Chain has minimal functionality, its primary use case is to coordinate the Kusama network as a whole.
9) KSM Token: KSM is the native cryptocurrency of Kusama that helps in maintaining and operating the network. It doesn’t have a supply cap. Rather, the network releases new KSM tokens to release in perpetuity, at a pre-decided inflation rate. Token holders can stake KSM to gain the ability to vote on any changes/upgrades to the Kusama network.
In terms of price, KSM started at $1.71 in December 2019. However, shortly, the price dipped and continued bouncing between $1 and $1.20. Later, the launch of the Polkadot mainnet pushed KSM’s price higher to the levels above $14. Since then, its price has continued to reach new highs and even broke the $100 level. At the time of publication, KSM is trading at $407.56, with a market cap of close to $3.7 billion.
New Updates and Upgrades
10) Gavin Wood, the founder of Kusama, shared in a medium blog that the network is under audit. After a satisfactory audit, the team will roll out parachain auctions in different phases. Once all the stages bring results par with the expectations, Polkadot will be rolled out. As the launch of parachain functionality on Kusama is a highly anticipated event, the new update is most likely to push KSM tokens to new heights.
The future of blockchains and cryptocurrencies is in an interoperable network. The canary network of Polkadot, Kusama, includes all the necessary features and functionalities that the crypto community requires. Additionally, it promises to solve some of the inherent issues of the crypto space, including scalability and transaction per second rate. However, we are yet to see Kusama in operation. Only time will tell if the network proves its claims.
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