As many of you probably already know, Polkadot is one of the freshest blockchain protocol aiming to create an ecosystem of crypto projects (much like the Ethereum network).
Polkadot was founded in 2016 by Gavin Wood (one of the co-founders of Ethereum) together with Peter Czaban and Robert Habermeier but it required a lot of effort to achieve the High Stability and High Security features of the protocol.
Meanwhile, in 2019 Gavin Wood decided to release an early version of the same code used for Polkadot and he called this new project Kusama.
The name is a tribute to Yayoi Kusama, a Japanese contemporary artist well-known for her series of happenings in which naked participants were painted with brightly coloured polka dots.
What exactly is Kusama
Kusama is a "canary network" for Polkadot (that's why KSM symbol is a canary), a scalable network of specialized blockchains built using Substrate. It acts as sandbox for developers who want to test early versions of Polkadot projects, but with real cryptocurrency.
Kusama embraces most of Polkadot’s design features. Like its educated cousin, it uses two types of blockchains – a main network, called Relay Chain, and user-generated networks, called Parachains. Kusama Relay Chain uses a variation on proof-of-stake (PoS) consensus called nominated proof-of-stake (NPoS).
The KSM cryptocurrency
KSM is the official currency for the Kusama network, and it's used to conduct every single action on the blockchain.
As the official Kusama Guide states:
Kusama is owned by those who hold the Kusama tokens (KSM).
Anyone who stakes KSM (i.e. locking the cryptocurrency in a special contract), can perform the following roles:
- Validators – Validate data in Parachain blocks. They also participate in the NPoS mechanism and they're able to vote on the different proposals of changes to Kusama network.
- Nominators – They are responsible of securing the Relay Chain by selecting trustworthy validators. Nominators also delegate their staked KSM tokens to validators and allocate their votes to them.
Staking KSM and performing these roles earns you KSM rewards.
Governance in the Kusama Network
Network governance is very similar to Polkadot: in order to make any changes to the network, active token holders and the council come together to administrate a network upgrade decision. No matter whether the proposal is proposed by the public (KSM holders) or the council, it finally will have to go through a referendum to let all KSM holders, weighted by stake, make the decision.
Every KSM holder can propose changes to the network and approve or reject major changes proposed by others, by depositing the minimum amount of tokens for a certain period (number of blocks).
The maximum amount of active proposal is currently set to 100.
The speed of the governance system is much faster on Kusama than Polkadot: in Kusama, it takes 7 days to vote on a referendum and 8 days to implement changes, compared to 2 months total on Polkadot.
KSM Price Analysis
Since its first public sale in late 2019, KSM price is going up exponentially, with nearly a 1000% growth in last 6 months:
Since it's pretty clear that staking KSM is extremely useful for everyone who wants to participate in the governance process of the blockchain, and the rewards are still pretty high, the price of KSM can still go upwards. The fact that both Polkadot and Kusama are still in a very early stage is also encouraging for whoever wants to invest in the project.
You can currently trade KSM on a very large number of exchanges, but I recommend using Binance, since it's the one with largest trading volume, and since it also offers a very convenient staking mechanism with up to 21.49% APY.
If you are new to Binance, you can register using my invite link here. You'll get a discount on trading fees and 5$ as a welcome bonus.
Projects on the Polkadot Ecosystem
The Kusama/Polkadot blockchain is really promising and interesting. A lot of projects are already running on it, and a lot more are coming in the future. You can find the list of the most widely-spread ones on CoinMarketCap.
Among the most promising ones, I can name Polkastarter, a launchpad for early-stage multi-chain token, and Litentry, a decentralised Identity Management and Authentication Infrastructure.
Wrapping Things Up
Kusama is unusual among blockchain platforms, since it is mainly built for developers wanting to launch ambitious projects with a fast development pace.
Here's a tweet from the official Kusama profile explaining what you can do on Kusama/Polkadot using a comic strip:
Thanks for reading, let me know what do you think about it in the comments and feel free to share your experiences!
