Kusama (KSM), the experimental network parallel to Polkadot (DOT)

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Kusama (KSM), the experimental network parallel to Polkadot (DOT)
Kusama (KSM), the experimental network parallel to Polkadot (DOT)

Kusama (KSM) is an independent network acting as an experimental version of the Polkadot (DOT) network. These two protocols are very related and were both developed by the same organizations. Kusama offers a faster and less expensive environment for developers wishing to test their applications before a possible deployment on Polkadot, which is under real economic conditions. Focus on a surprising project nicknamed the canary network.

What is Kusama (KSM)?

Kusama (KSM) is a blockchain network developed by the creators of the Polkadot (DOT) protocol, of which Gavin Wood, the co-founder of the Ethereum blockchain, is a part. Launched in May 2019, Kusama is a parallel network to Polkadot, which among other things, serves as an experimental network for the latter. These are called layer 0.

These two projects are intimately linked, and to better understand Kusama, it is necessary to know more about Polkadot, 

Kusama is very cleverly nicknamed the Canary Network in French. In the 1800s, it was common to find canaries deep in coal mines. These served as a go-to tool for miners to detect poisonous gas fumes in mines since canaries would faint or die.

What is the relationship with the Kusama Network?

This acts as a canary for the Polkadot protocol, warning developers of possible problems or bugs, dangers and vulnerabilities in the code.

Concretely, the architecture and operation of the two projects are very similar since Kusama was designed to be an experimental version of Polkadot.

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Figure 1: Illustration of Kusama’s approach

Experimental version since Kusama is an unaudited version of Polkadot, the purpose of which is to be used to test new features before deploying them on Polkadot.

But the experimental version does not mean testnet because Kusama is a blockchain network that uses a native token, the  KSM. These have their own value, whereas, in a testnet, the tokens used have no value. It is crucial to make the distinction here.

The Kusama network benefits from the latest technologies from Parity Technologies and the Web3 Foundation before the Polkadot network while being much faster than the latter. Development teams can therefore use Kusama to try new technologies, innovate or take risks since Kusama allows rapid growth at a lower cost.

Kusama is based on Substrate. It is a development kit developed by Parity Technologies comparable to Cosmos SDK. It allows developers to create blockchains by combining pre-built modules in an easy way. Polkadot was also created with Substrate, which attests to the high level of performance, flexibility and robustness of this kit.

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Figure 2: Kusama (KSM) logo

Kusama and Polkadot, Similarities and Differences

As we have seen, these two projects share many similarities. However, Kusama and Polkadot are indeed two independent networks with very distinct objectives.

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Figure 3: Kusama and Polkadot

While Kusama is fast and particularly suitable for experimentation and early stage deployments, Polkadot is more conservative, emphasizing reliability and stability.

We will see here what the two networks have in common and then their differences.

The Common Points Between Kusama and Polkadot

Since the Kusama network is the canary network of Polkadot, both share the same underlying technology. These are two multichains based on a Nominated Proof of Stake (NPoS) consensus. Kusama uses a sharding model with para-chains.

They both have nominators, validators, collectors and governance actors. Both have a Relay Chain, the main chain of the network, which coordinates the consensus and the communication between the para-chains (parallelizable chains), and the secondary chains, via the bridges of the protocol.

These can have their own economies and tokens. The peculiarity comes from the fact that the para-chains are auctioned, which means that operating a para-chain has a certain cost.

Both projects benefit from a very high level of development activity in 2021.

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Figure 4: Most Developed Blockchains in 2021

Governance over both projects is designed to be decentralized. By owning the network’s native token (DOT for Polkadot or KSM for Kusama), it is possible to influence governance decisions. For this reason, over time, Kusama and Polkadot gradually evolve independently since each network has its own governance and its own token.

Differences between Kusama and Polkadot

Both projects each have their own native token, as seen previously, and they also have a different circulating supply.

The main technical difference comes from governance settings. Indeed, Kusama gives the possibility to update its product 4 times faster. KSM token holders only have 7 days to vote for a referendum, and 8 days are needed for enforcement.

On the Polkadot side, votes last 28 days and are followed by a 28-day enforcement period—56 days in total against 15 days for Kusama.

This is implied when observing that Kusama is faster. It’s not in terms of transactions per second or in terms of block production since they’re equal in that regard, but it’s about governance. Kusapore offers an environment capable of adapting and evolving more quickly.

For development teams wishing to operate a para-chain, it is necessary to stake tokens: this is called bonding. The system works the same on Kusama, although the requirements are lower than Polkadot.

Therefore, developing on Kusama gives the opportunity to experiment on a completely decentralized and community-governed network under real-world conditions and with lower risks in case something goes wrong. This is where the strength of the project lies and why many projects maintain para-chains on both networks at the same time.

Here is an overview of the advantages and use cases of each network.

Advantages

KusamaPolkadot
Few barriers to entry to deploy a parachainvery stable
The latest technologies are integratedHigh security
Few penaltiesHigh rewards for validators
Faster iterationMore conservative governance and updates

Use cases

KusamaPolkadot
Deployment network for early stage applicationApplications for businesses and B2B
Experimenting with new ideasFinancial apps
Pre-production environment for PolkadotApplications dealing with high transactions requiring a high level of security
Applications that do not need to be robust in terms of securityUpgrade path for early-stage applications
Bonding requirements are lower

The Kusama Ecosystem

The Kusama ecosystem is governed by network governance actors.

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Figure 5: Diagram illustrating governance on Kusama

KSM token holders may propose and sponsor public proposals regarding the governance of the Kusama network. The most sponsored proposals are periodically selected to be submitted to a referendum, which will be subject to a vote.

The council can also submit proposals, as well as the technical committee, in case of emergency. If the majority of KSM holders vote in favour of the proposal, then it will be implemented in Kusama’s code.

The Board

Through an election, 13 members are elected to serve on the board.

The roles of the board include the responsibility of electing the members of the technical committee. They also have a right of veto modelled on the United Nations Security Council. Council members have the ability to veto any proposal on the Kusama network.

Finally, like the technical committee, they have the power to speed up the submission of a referendum in the event of an emergency.

The Technical Committee

Elected by the board, the members of the technical committee are the development teams. These must have successfully deployed products to Polkadot and Kusama as a prerequisite. They have the responsibility to determine if a submission is urgent or not, and if it is, then they have the power to expedite its integration with the council.

Kusama’s Treasury

It consists of funds collected via transaction fees, lost deposits, inefficient staking on the network (below 50%) and penalties (validators who do not act in the interest of the network, for example).

A particular type of proposal may be submitted to the board for the purpose of being funded from the treasury. If the proposal is more than 51% approved by the board (they will determine whether the proposal will create value on the Kusama network), then the development team will be funded with the funds.

To submit a proposal to the treasury, it is necessary to post a deposit of 5% of a prerequisite amount or 0.066667 KSM (whichever is higher) in order to prevent spam. If the proposal is adopted, the deposit is returned; otherwise, this deposit will be lost and redirected to the treasury.

There is also a tipping mechanism to reward community members involved in development (translation, social media representation, etc.)

Unused treasury funds will be burned to encourage the board to spend all available funds. There is, therefore, a mechanism for burning the KSM token through this.

Karura, the all-in-one DeFi on Kusama

The Karura network is a project developed on the Kusama network and with the Substrate development kit.

Similar to the Acala network on Polkadot, it is a network that notably offers a decentralized exchange (DEX) with Karura Swap. Its goal is to create a scalable network compatible with the Ethereum Virtual Machine (EVM) and optimized for the deployment of decentralized finance (DeFi) applications.

It is the first project to have benefited from a para-chain slot on the Kusama network, having locked 500,000 KSM tokens for it, which is the equivalent of $100 million at this time.

Launched in June 2021, Karura’s app offers services for DeFi and uses a native token, KAR.

The project also benefits from its own governance and perfectly illustrates the independence that a para-channel on Kusama can benefit from.

The other Kusama network para-chains

There are, of course, other para-chains deployed on Kusama; we could mention Moonriver, which is basically the Kusama version of the Moonbeam network deployed on Polkadot.

Moonbeam’s new features are first deployed on Moonriver to test the code under real economic conditions on Kusama. Once all the tests have been carried out, these new features are deployed on Moonbeam on the Polkadot network.

Similarly, Shiden Network on Kusama is the canary network of Plasm Network on Polkadot. There are other para-chains on Kusama like Bifrost, Khala, Kilt Protocol or even Statemine.

What are the Roles of the KSM Token

Kusama’s native token is KSM, and it has multiple roles within the ecosystem.

Thus, KSM token holders can use it to participate in network governance. It is possible to submit, sponsor and vote on proposals submitted by others, nominate validators by staking KSM tokens or even become a validator.

The KSM token is also essential for deploying a para-chain on the Kusama network. Indeed, for this, it will be necessary to lock many KSM tokens throughout the life of the para-chain. This mechanism is called bonding, and we mentioned it in particular, the deployment of the para-chain Karura.

Finally, the KSM token is obviously used to pay the network transaction fees.

Kusama’s Tokenomics

Kusama has not benefited from any fundraising. At its launch, investors who participated in the various Initial Coin Offerings (ICO) and private sales of Polkadot (DOT) benefited from an airdrop of KSM tokens at a ratio of 1 to 1 with DOT tokens.

Investment funds such as IOSG Ventures, LongHash Ventures or even Fabric Ventures have therefore also received an airdrop of KSM tokens.

The KSM token is inflationary, at the rate of 10% per year. There is no maximum circulating supply like the DOT token. As of this writing (May 2022), there are 9 million KSM tokens in circulation, which explains its higher unit price than DOT.

Each year, therefore, the 10% of newly issued KSM tokens are allocated to validators and the Kusama treasury. The percentage of staked KSM tokens governs the allocation of these tokens.

Indeed, if more than 50% of the circulating supply is staked, the validators will receive all of the new tokens issued. Otherwise, these rewards will be split between validators and Kusama’s treasury.

Kusama’s Team

The Kusama project is supported by the same organizations that created Polkadot, namely Web3 Foundation and Parity Technologies. A renowned figure in the industry is notably behind these two projects:

  • Gavin Wood, president of Web3 Foundation, founder of Parity Technologies, co-founder of the Ethereum blockchain alongside Vitalik Buterin and notably creator of Solidity;
  • Robert Habermeier: co-founder of Polkadot, he has extensive experience in research and development on blockchains, cryptography and distributed systems;
  • Peter Czaban: Chief Technology Officer of Web3 Foundation, he works on the development of next-generation distributed technologies.

Kusama is completely open-source, and therefore many actors can work on the project.

How to Buy KSM Tokens

The KSM is available on many exchanges such as Binance, Kraken, KuCoin, Gate.io, or Crypto.com

Explanations for buying KSM on Binance

  • Register on Binance;
  • You will receive an email and need to click on a link to verify your account;
  • Deposit funds on the platform;
  • Click on the Market menu and look for the  KSM/USDT pair;
  • All you have to do is buy KSM for the amount of your choice;
  • Congratulations, you are now in possession of KSM tokens.

Our Opinion on Kusama

The Kusama canary network has a unique position in the cryptocurrency industry. Closely linked to Polkadot, while being a completely independent network, Kusama stands out by giving developers the opportunity to experiment with their codes under real economic conditions in an environment that allows for faster updates in particular.

Kusama helps make the Polkadot network more secure by serving as a sandbox for developers, but reducing this project to just that would be misleading.

Since the Kusama network has its own governance and its own native token, the KSM, the direction that this project is taking is gradually diverging from Polkadot, and some developers are choosing to stay on Kusama without ever deploying their products on Polkadot.

The successes of Polkadot and Kusama are closely linked. These two projects will continue to coexist with their own reasons for existing. The canary network has become indispensable to Polkadot, and it benefits from the deployment of new para-chains first.

Kusama, therefore, benefits from all new technologies first, and this is a great strength for the network. In the future, it is likely that Kusama will be linked to Polkadot so that the two networks are completely interoperable.