What is Kusama? How Polkadot Attracts Blockchain Developers

Kusama is a sister network to Polkadot, a high-profile blockchain created primarily to test solutions for scalability and interoperability before deploying them on Polkadot. Due to this experimental nature, Kusama has become a hotbed for early-stage projects looking to build on Polkadot-like infrastructure. Kusama’s native token, KSM, is currently being traded on many major crypto exchanges. So what is Kusama?

Read more: What is Polkadot (DOT)? Things to know about DOT token

What is Kusama (KSM)?

Kusama is still relatively young, founded in 2019 by Dr. Gavin Wood, who is also the founder of the Web3 Foundation and co-founder of Ethereum. The team behind Kusama is essentially the same team – Parity Technologies – that created Polkadot. This team consists of well-known and reputable blockchain technology engineers, giving Kusama credibility.

Like many blockchain-based projects, Kusama aims to play a role in building a fair and decentralized internet. At the same time, it is extremely similar to Polkadot and has the ability to organize different blockchains into a network of parachains. Because it is built on Substrate, developers can create their own blockchains and connect them to the main network.

Even so, Kusama is still a blockchain with obvious differences from Polkadot. Polkadot is larger, using a more coordinated and careful governance approach that prioritizes security and network stability. Kusama’s role as a testnet for Polkadot means it’s better suited for smaller-scale, more risky projects.

What is the difference between Kusama and Polkadot?

Perhaps the most notable feature of Kusama is its adaptable nature. It is open to a variety of developers looking to implement modern blockchain-based projects, Kusama has become a popular “home” for experimental protocols – something many other blockchains are not special about. care.

Because Kusama features smart contract support and a highly scalable chain that supports both private and public blockchains, the variety of applications that can be built on the network is astounding. In theory and practice, developers can create anything on Kusama.

Kusama can also upgrade without a hard fork thanks to its proof-of-stake consensus mechanism which is a variant known as nominated proof of stake. (nominated proof-of-stake), or NPoS. On-chain governance is decentralized, anyone holding KSM tokens or parachain tokens can vote them on governance proposals. This produces faster network upgrades when compared to the relatively slow Polkadot, which takes about two weeks to vote and perform the network upgrade.

Tokenomic of KSM token

Kusama is a proof-of-stake blockchain, which means that holders of the network’s native token KSM are incentivized to stake it for rewards. As a result, staking in Kusama has become a popular method to generate passive income. Currently, staking KSM gives an annual return of approximately 14%. However, this can fluctuate based on many market factors.

Interestingly, if 50% of all KSM in circulation is staked, then validators (validators) on Kusama network will get 100% block reward. Otherwise, a portion of the KSM generated will be transferred to the Kusama Treasury.

KSM has experienced explosive growth in 2020, along with the increase in the price of Polkadot’s DOT token. Kusama’s native token rose from a low of around $1.50 at the start of the year to well over $70 before the end of the year, benefiting greatly from Polkadot’s mainnet launch.

KSM was initially launched via airdrop to accounts participating in Polkadot’s DOT token sale, at a 1:1 ratio. It is currently the 43rd ranked cryptocurrency by total market capitalization. Unlike many other coins and tokens, its market cap and fully diluted market cap are almost the same, over $3.2 billion and almost $3.7 billion respectively.

The total supply of KSM is currently 9,651,217, but the maximum supply is not fixed. Instead, Kusama has an inflation rate of 10% per year, which may deter some investors.

Conclude

Kusama has gained a certain amount of attention in the blockchain and crypto space thanks to its experimental and developer-friendly activity in blockchain and application development. Despite having many similarities with Polkadot, Kusama develops at a faster pace and is willing to develop innovative and risky projects, whatever they may be.

The KSM token has experienced explosive growth during its lifetime and has become a popular tool for generating passive income through staking. However, Kusama’s advantages may be limited as it is primarily designed to be a test net for the more powerful Polkadot.

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