Kusama (KSM) Review: Is Worth to Invest?

Kusama

Maybe you’ve recently heard about Kusama, although it isn’t a new project. Launched in May 2019 it is a parallel Polkadot network. It was built using the same code base and the same structure, but works far more rapidly than Polkadot. Although some may think of it as a testnet it is far more than that. It is a development environment that can be used in the same way as Polkadot, but far more rapidly, allowing teams to try out new technologies, innovate on existing projects, and prepare for a full Polkadot deployment.

KSM Price History

The KSM token began trading before the DOT token, opening at a price of $1.71 in December 2019. The price quickly dipped and headed into 2020 just below $1.20.  After bouncing between $1 and $1.20 for January and the beginning of February price began moving higher. It continued climbing steadily higher through mid-August, when it hit levels above $14 and then took off higher in response to the launch of the Polkadot mainnet.

The Intended Use for Kusama (KSM)

Kusama has been called the Canary network for Polkadot in a reference to the practice of miners carrying canaries with them into a coal mine to provide an early warning of carbon monoxide and other dangerous gases that could hurt the miners or even cause the mine to explode. Kusama is the canary that warns developers of any problems, dangers, and vulnerabilities in the code they are building.

Kusama is also called the “wild cousin” of Polkadot, and developers are warned to “expect chaos” and that there are “no promises” when building on Kusama.

In short, Kusama is no testnet. A testnet is a development environment, but they use valueless tokens. Kusama has the KSM, which has a definite value. Kusama is the developmental network where new features for Polkadot are tested and perfected, but it is also an environment for rapid development and innovation.

Builders

The builders are those who are creating parachains, bridges, parathreads, and other features on the network. In essence these are the development teams and individual developers. There are a number of reasons why development teams might considering using Kusama for their development efforts:

  • Because Kusama uses the Polkadot code base developers will have almost the same experience as building on Polkadot;
  • Kusama development is far faster than development on Polkadot;
  • Once built these projects from Kusama can easily be moved to Polkadot if desired;
  • Deploying on Kusama is likely to be far less expensive than deploying on Polkadot.

Network Maintainers

Kusama uses the same set of actors as Polkadot to maintain its network. These actors include the nominators, collators, validators, and the governance actors. It’s a diverse set that work together to ensure the security, stability, and evolution of the network.

The processes begin with the nominators, whose role it is to choose validators who will act properly and who will remain reputable. Nominators can be anyone and they vote for validators by delegating their tokens to the validators they choose. In return they receive a portion of the block rewards earned by the validators they have voted for.

The Three Branches to The Governance Process on Kusama (KSM)

  • Referendum chamber: This is the sum of all KSM holders and is the group that submits change proposals and votes on those proposals to see which will go forward. They also vote for the council members, and can apply to become council members themselves.
  • Council: The Council consists of 13 members who are elected to represent the members of Kusama who remain passive. There is a vote every 24 hours to determine the council members. The council is responsible for electing the technical committee, the can veto referendum, and can propose and fast track referendum as well.
  • Technical committee: As mentioned above the technical committee is elected by the council. It can include devs or dev teams and the role it takes is to determine how critical each proposal is and then decide along with the council whether it needs to be fast-tracked. This ensures that urgent proposals get voted on and implemented first regardless of the amount of KSM being bonded to the proposal.

The Kusama (KSM) Treasury

The Kusama treasury consists of funds collected from transaction fees, lost deposits, inefficiencies in staking, and slashing penalties. Any KSM holder can make a spending proposal by bonding 5% of the amount proposed to be spent from the treasury. In order to pass a proposal must receive an aye vote from a minimum of 60% of the council. If the proposal gets fewer than 50% of the council vote the 5% bond is slashed. This process occurs once every 6 days.

Parachains and Parathreads

From a technological standpoint there is little difference between a parachain and a parathread. In fact, the parachain can become a parathread and vice versa. The real difference between the two is economic.

Parallelizable chains, called parachains in Kusama, are a simplified blockchain that relies on the Layer-0 security provided by a Relay Chain instead of providing its own security. The Relay Chain validators provide validation for transactions and blocks after receiving the created blocks from parachain collators.

Parathreads differ from parachains in that rather than being acquired through an auction, the parathreads will have a fixed registration fee. It is expected that parathreads will be far less expensive to acquire. However, in the long run, they could become more expensive since they will be subject to a fee for each new block produced and included on the Relay Chain.

Conclusion

As a cousin network to Polkadot we see a great deal of potential in Kusama. Not only was it developed by the same visionary mind that first helped bring us Ethereum and then went on to create Polkadot, it also shares the solid development team behind Polkadot and the innovative and forward-thinking code base of Polkadot.

Like its bigger cousin Polkadot, there’s just so much to get excited about regarding Kusama. The increasing adoption, and the growth of areas like DeFi that are a perfect match for these projects means this could be the next token to catapult to the moon or further.

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