Kusama (KSM) : Overview, Technology and Prospects

What is the KSM Token?

The KSM token is the native cryptocurrency of the Kusama network (similarly to DOT being the native token of the Polkadot network). Its initial distribution follows the same pattern as the distribution of the DOT token. Essentially, this means that if you participated in the DOT ICO, you will have access to the same amount of KSM tokens that you acquired during the DOT ICO. This serves as an incentive for token holders to use the Kusama network and support its development. However, perhaps the most significant change in Kusama is related to the generation of tokens through network rewards.

The KSM coin functions as a governance token to manage protocol upgrades and fixes, as well as for paying for services through parachains. Validators stake their KSM to ensure network security and receive rewards for inflation, while nominators can use their KSM to show support for specific validators and receive a portion of the rewards. Additionally, the KSM cryptocurrency can be used for bonding to support new parachains.

In Simple Words

The Kusama cryptocurrency serves as a publicly accessible pre-production environment for Polkadot, providing developers with the opportunity to experiment and trial new blockchains or applications before launching them on the main network. It operates as a “sandbox” for programmers, offering a real cryptocurrency that is tradable on the open market, allowing them to test early versions of projects within the Polkadot blockchain ecosystem.

History of KSM

The KSM project was initiated in 2016 by the founders of Polkadot: Gavin Wood, who was also part of the Ethereum team, Robert Habermayer, and Peter Czaban. Prior to this, Gavin Wood invented Solidity, the programming language used for developing decentralized applications (dApps) on the Ethereum platform. Kusama network was launched in May 2019, operating in parallel with Polkadot. Although built on the same code and structure, Kusama functions with higher speed.

Some users consider the KSM cryptocurrency merely as a testing platform. However, in reality, it has the potential to be a replacement for Polkadot, sometimes referred to as “Polka”. Notably, Kusama operates at a faster pace. The platform allows developers to test technologies, introduce new features, and prepare their applications for deployment on Polkadot.

Kusama is often described as the “canary” network for the cryptocurrency DOT. In the past, miners used canaries in mines to warn them of the presence of carbon dioxide and other dangers. Similarly, Kusama serves as the “canary,” informing developers about difficulties and vulnerabilities in the code.

Operating Principle

Kusama operates similarly to Polkadot, utilizing two types of blockchains: the main network, also known as the relay chain, which processes constant operations, and the participant-created blockchains called parachains. To increase speed, the branching chain separates transaction creation from their confirmation.

Parachains can be customized for various tasks, leveraging the main chain for transaction security and accuracy. The advantage for projects on the KSM blockchain is that it allows them to build a broad user base and establish themselves in the community before an official launch.

The relay chain employs a proof-of-stake (PoS) consensus mechanism for agreement. Participants who stake KSM in a separate smart contract play different roles crucial to the system’s operation.

There are three groups of participants who influence the software development:

1. Referendum Chamber: KSM holders can propose network improvements and participate in voting.

2. Council Members: Elected by coin holders, they determine which proposals are implemented in the software. The council currently has 7 seats, but more are expected to be added as the community grows.

3. Technical Committee: Comprising development teams, they contribute to the platform’s development and can initiate special reviews as needed. The committee is elected by council members.

Transaction Speed

Kusama is 4 times faster than Polka dot. The transaction processing speed in the network is 4 thousand operations per second.

Distinctive Features

One of the key features of the Kusama (KSM) cryptocurrency is its role as a “canary” for the Polkadot blockchain. In Kusama, the code is released without prior verification and is available for use before its launch on Polkadot. The main difference between these two networks lies in the speed of their governance system. On Kusama, the voting process takes 7 days, and an additional 8 days are needed for implementing changes, whereas on Polkadot, this process takes a whole month.

Additional features of Kusama:

  • Scalability: Kusama addresses the scalability issues faced by projects like Ethereum, such as high fees and network congestion. The Kusama network is designed to avoid such situations.
  • Community Governance: The system is governed by coin holders, providing a level of decentralization not seen in competing networks like Ethereum, which has been criticized for relative centralization due to its Proof-of-Stake algorithm.
  • Interoperability: Kusama enables interaction between different blockchains, eliminating barriers for collaboration between systems.
  • Enhanced Security: Coin holders are responsible for network management, making it genuinely decentralized and secure. The system is designed to prevent hard forks, further increasing its reliability.

How Can You Get Kusama Coins?

You have several ways to acquire KSM tokens. The most common method is by purchasing them on various well-known cryptocurrency exchanges. However, Kusama has also introduced a unique opportunity for those who acquired DOT tokens during the ICO. Holders of DOT indicator tokens can follow specific instructions to receive an equivalent amount of KSM tokens. There is no fixed deadline for obtaining KSM through this method.

Furthermore, Kusama offers various incentive programs to its community members:

  • Treasury Proposals: Individuals or projects that can enhance the network’s value can submit proposals for financial support.
  • Bug Bounty Program: Participants who discover vulnerabilities in the Kusama code can receive rewards as part of the bug bounty program.
  • Validators: Validators can request rewards for running validation nodes. The required amount of KSM to become a validator is dynamic and may change over time.
  • Nominators: Kusama nominators act as passive investors by delegating their KSM to up to 16 validators. They receive rewards based on their delegation, and these rewards can vary over time.

What Affects the Price of a Cryptocurrency?

Like most other digital assets, the price of a cryptocurrency is influenced by the overall market situation. Almost all coins move in sync with the BTC price. When the value of Bitcoin rises, other assets often experience an increase as well. Looking beyond the main cryptocurrency, the fundamental factor impacting the exchange rate is the project’s stage of development and its successes or failures.

Improvements to the platform, updates that enhance its features, positively affect the price. Negative news, such as network hacks, can lead to a decline in cryptocurrency quotes. It is essential to note that the cryptocurrency market is highly volatile and can be influenced by various factors, including news, regulations, global events, and investor sentiment.

Future of Kusama and KSM Coin

The prospects of the cryptocurrency Kusama (KSM) are promising, as it and Polkadot are independent and autonomous networks with their own communities and governance systems. While they will continue to maintain close relations, many groups are likely to deploy applications on both networks. This presents an opportunity for various projects and applications to flourish on both platforms, fostering the development and implementation of new technologies. As a result, Kusama has the potential to attract diverse use cases and participants to its ecosystem.

Web3 Foundation and Parity Technologies remain committed to both networks, providing critical support and guidance to development teams within the ecosystem. In the future, Kusama will continue to fulfill its original role as a testing ground, ensuring that Polkadot remains as reliable, stable, and secure as it should be in a decentralized network. As a result, the demand for purchasing KSM tokens for deployment is expected to grow, which, in turn, will have a positive impact on the token price in the future.