Kusama (KSM): What is it?

Kusama (KSM) is a network of specialized blockchains built upon Substrate, almost identical to Polkadot’s codebase. It provides fast, innovative development environments for teams that want to use Kusama or prepare for Polkadot deployment.

Who was the creator of Kusama (KSM)?

Polkadot creators Gavin Wood (a co-founder of Ethereum), Peter Czaban, and Robert Habermeier founded Kusama in 2016. 

Solidity is the language used by developers to create decentralized applications (dapps) on Ethereum. Wood is credited with inventing Solidity. Previously, he worked at Microsoft as a research scientist.  

The company that Wood founded in 2015 is Parity Technologies, a developer framework that allows developers to create parachains for Kusama. 

In addition to leading Polkadot’s token sales, Wood leads the Web3 Foundation, a non-profit that raised roughly $200 million in investment funds as a result. 

Uses of Kusama (KSM):

Kusama is geared towards a wide range of developers seeking to develop cutting-edge and innovative blockchain projects. Several applications, including marketplaces, oracles, social networking, gaming, and eSports, are conceivable by integrating both private and public blockchains, smart contracts, and high-performance chains.

Developers find Kusama appealing because it enables quick changes to meet business needs, has low entry barriers for lean startups, and provides a collaborative and engaging community. As an additional advantage, developers can test their applications before deploying them on Polkadot with Kusama, as it offers all the latest tech tools from Parity Technologies and Web3 Foundation even before Polkadot is available.

Kusama joined some big blockchain projects in 2020, including Chainlink. Chainlink is an online network of servers that connects real-life blockchains with real-world data streams. Chainlink has decided to deploy a parachain on Kusama before launching a parachain on Polkadot. Any Kusama project would be able to access data outside of the blockchain via this parachain.

Kusama’s Treasury can attract new projects. As part of the Kusama Network, tokens are collected from transaction fees and slashing. By using these resources, community members can propose projects that can benefit the entire network. As part of its 2020 development, Kusama Treasury will support local coin swaps targeting easy blockchain access for non-technical users, plus Polkawallet and Soramitsu’s Wallet to provide alternatives for Kusama and Polkadot holders.

As a way to grow their portfolio with stake rewards, crypto investors may find Kusama of interest. By staking their coins on Kusama, KSM holders can earn rewards. According to Staking Rewards, the annualized return on KSM staking is 14,03 percent. The rate fluctuates depending on the number of coins staked on the network.

The Kusama (KSM) Governance Process

Each of the three governance actors can initiate the governance process. If the referendum chamber or council wishes to make a public proposal, the council can do so, and the technical committee may make an emergency proposal. Each of these changes may change the Kusama protocol in some way.

As the primary method of governance, the referendum contains the proposal and allows the people to vote on whether to make changes to the protocol. The parameters of a network can be changed, a parachain can be registered or de-registered, and funding can be approved through a referendum.

In Kusama, every eight days, a referendum is held. This proposal becomes the top proposal and is put to a referendum. Public proposals will alternate with council proposals to ensure neither takes precedence.

Everyone with a KSM stake has the option of voting (weighted by stake) for or against a proposed change. After an 8 day waiting period, the referendum is enacted if it passes.

According to Kusama‘s Adaptive Quorum Biasing concept, proposals are passed more easily or more difficult depending on which governance group submitted them and the number of people who vote. When turnout rates are low, and approval must be obtained by a supermajority, which means fewer “yes” votes are required, but as turnout climbs toward 100%, it becomes a simple-majority requirement.

Is Kusama (KSM) Valuable?

KSM is one of the key cryptocurrencies that facilitates Kusama’s operation and maintenance.

KSM holders can vote on network upgrades based on how much cryptocurrency they own. 

Users stake tokens with Kusama for newly minted KSMs, with nominators and validators receiving rewards for the stake.

KSM, however, does not have a cap on supply, which is important to investors. A predetermined inflation rate will be used to release new KSM tokens in perpetuity.