What is Kusama Coin (KSM)?

Kusama Coin (KSM) is Kusama’s native token, owned by token holders within the Kusama network rather than a centralized authority and the protocol updates are decided by on-chain governance. Therefore, Kusama is governed by a community of network users who also set the direction for the network’s future development.

Any user holding KSM (or parachain tokens) can vote on propositions because it is open-source and decentralized. These proposals may relate to improvements, feature requests, and other modifications to the Kusama protocol. Read further to learn more about the Kusama coin (KSM), how it works, and its use cases. Before we delve into the topic, let’s learn about the Kusama network.

History of Kusama Network

Dr. Gavin Wood, the founder of Polkadot, who was also co-founder and former CTO of Ethereum, created Kusama in 2019. Kusama was first introduced as Polkadot’s testnet, but it quickly developed into a network with its governance and road map. Parity Technologies, headquartered in London, United Kingdom, supervises and manages the project’s development in partnership with the Switzerland-based non-profit group, Web3 Foundation.

What is Kusama Network?

Source: Kusama Website

Kusama is Polkadot’s public pre-production platform, where developers can explore and develop new blockchains or apps before publishing them on the network. In this sense, Kusama can be thought of as a sort of playground for developers who wish to test various prototypes of Polkadot’s projects using real crypto traded on an open market. Before being released, official Polkadot updates are also assessed on Kusama.

Kusama aims to provide developers with so much leeway while they complete the final design of their Polkadot productions since its foremost use case is to enable testing. Also, Kusama has hardly any more stringent governance parameters than Polkadot.

Kusama network imitates the majority of Polkadot’s design elements, for example, employs two kinds of blockchains: a primary network known as a relay chain, from which transactions are stable, and user-generated networks known as parachains.

Parachains can be tailored to any purpose and rely on the primary relay chain for security. Starting a project on Kusama has the potential benefit of allowing Polkadot projects to create a user base and take root in the community before the official launch.

What is Polkadot?

As a multi-chain network, Polkadot is a blockchain technology designed to link various blockchains together on a network. Despite myriad blockchain initiatives that are improving the normal way of doing things, the crypto space still experiences the challenge of scalability and this is what Polkadot seeks to correct.

Polkadot aims to connect blockchains to a single platform because the majority currently run independently and within the boundaries of their respective networks. This will make it possible for several blockchains to operate simultaneously on a “parachain”. Further, Polkadot tries to connect the gaps with other networks and produce one that is somewhat interoperable. This goes a long way toward resolving the blockchain interoperability issue.

The native token of Polkadot is the DOT token, which is used for governance and staking and can be purchased or traded on Gate.io and other exchanges.

The Kusama Network’s Ecosystem

The Web 3.0 ecosystem is expanding, and Kusama was developed to adapt to the new and burgeoning technology. Additionally, it possesses characteristics that are nearly identical to Polkadot’s. It’s intriguing how the protocol functions independently of the Polkadot network while enhancing its developing structure. The platform has a democratic structure that allows for innovative ideas and enables developers to launch their unique blockchains from various sources linking them to the main network.

Further, Kusama includes the most recent and effective technological advancements being made by Parity and Web 3.0 foundations. As a result, before releasing their blockchains on Polkadot, developers have the chance to use the given tech tools to establish their blockchains with quick iterations and thoroughly inspected processes.

How Does Kusama Network Work? Relay Chain and Parachains

Kusama network provides users the opportunity to create two types of blockchains namely, the relay chain and the parachains.

The Relay Chain

The Kusama Relay Chain employs a kind of proof-of-stake (PoS) consensus known as nominated proof-of-stake (NPoS) to maintain network consensus over the state of the system. Users who stake KSM by locking the cryptocurrency in a unique contract can carry out one or more of the following duties, which are crucial to the system’s operation:

• Nominators; chooses reliable validators to preserve the relay chain. Validators receive the KSM tokens that Nominators have staked on their behalf as a delegation of Nominators’ votes. Users that take on these responsibilities and stake KSM are also qualified to get KSM prizes.

  In essence, the relay chain is the major Kusama blockchain where transactions are completed. It isolates the act of adding a new block of transactions on the blockchain from the process of validating such transactions to increase speed.

Parachains

Parachains are a type of compact blockchain that makes use of and shares in the security offered by the relay chain. These parachains include the unique designs of the various individuals who own them. They function within the Kusama and Polkadot ecosystem and are typically managed by collators.

These collators are in charge of managing an entire node of parachains. Through incoming blocks, they send the relay chain validators pertinent data they have gathered from the parachains. Before adding new blocks to the relay chain, the relay chain validators will examine and confirm them during this process.

• Validators; confirm the information in each block of parachains and also take part in a consensus as well as vote on the network’s planned modifications.

What is Kusama Coin (KSM)?

Several blockchains, including Kusama, have their native cryptocurrency, and the Kusama Network Coin is called KSM. Kusama controls the network using its customized blockchain tech protocol, and it’s not an ERC20 token, this is the case for a few reasons.

It is first utilized on the Kusama network’s governance. Users can stake KSM to facilitate the operation of the network and to connect a blockchain to become a parachain on Kusama. This is in addition to the KSM coin serving as a utility token for users within its network.

KSM was created by the Kusama team in 2016. Gavin Wood, Robert Habermeier, and Peter Czaban, who also designed Polkadot, are a few of the main team members. In July 2019, KSM was opened to get claimed by anyone who had DOT marker tokens at the time of distribution.

The Web3 Foundation, which oversaw the token sales for Polkadot and Kusama, is also led by Gavin Wood. Interestingly, the Web3 foundation introduced Kusama to the public with a $1.71 price tag before DOT was officially launched. There are major similarities regarding the distribution of DOT and KSM in the sense that those who had bought DOT prior to the official sales period had the eligibility status to get the DOT equivalent of KSM in quantity.

The Kusama token (KSM) started trading in December 2019 for $1.71. The price experienced a rapid decline and was below $1.20 at the beginning of 2020. For most of January and early February, the price fluctuated between $1 and $1.20 before it began to rise. Up until mid-August, it climbed gradually upward until it crossed the $14 mark, at which point it suddenly soared higher as a consequence of the Polkadot mainnet debut. KSM’s Price rose to an ALT of $621.71 on May 18, 2021, but has since plummeted.

How Kusama Coin (KSM) Works

Kusama coin (KSM), the native token of Kusama Network, is comparable to the DOT token and includes the following use cases:

• Users can stake the KSM token as Validators.
• Parachain Auction: To obtain a Parachain slot, a project must participate in an auction. If the auction is a success, this KSM number will be locked.
• KSM can also be staked as a Kusama governance token.

Governance

The development of the Kusama network structure can be influenced by three different kinds of users.

They consist of:

• The Referendum Chamber - Users who buy KSM tokens can suggest network modifications and vote to accept or reject significant changes put forth by others.
• The Council is in charge of suggesting improvements and choosing which suggestions are implemented in the protocol. Council members are chosen by KSM holders. The Council on Kusama initially had seven seats, but as local interest rises, the number of seats will be increased.
• The Technical Committee, which is made up of teams creating Kusama, has the authority to submit unique suggestions in an emergency. The Council elects the members of the technical committee.

Tokenomics

Kusama distributed 100,000 tokens, or 1% of the initial DOT supply, to community members and stakeholders. They created the giveaway to link the platforms and encourage holders who were new to Polkadot to board Kusama.

Kusama has a treasury whose objective is to gather money through slashing, staking system inefficiencies, lost deposits, and transaction fees.

Users have the option to make spending requests that demand securing a specific amount of KSM on the network, adding 5% to the bid. These budget requests must receive at least 60% of the council’s approval. Kusama reduces the reserved cash if the proposal is rejected, but only if fewer than 50% of the council approves of it; this stops bad proposals.

Depending on how many tokens are produced, KSM is staked. Therefore, the validation maintains all of the freshly created coins if half of the total KSM tokens are staked. However, validators won’t support all of the newly issued tokens if the number of KSM staked is less than 50%; some of them will instead go to the treasury.

Market Activity

Bearing in mind that Kusama is a proof-of-stake blockchain, holders of the network’s native coin, KSM, are provided incentives to stake it in exchange for benefits. Due to this, staking Kusama coin has grown to be a well-liked strategy for making a passive profit. As of 2021, staking KSM results in an APY of about 14%. However, this is dependent on several market variables.

In 2020, KSM saw rapid expansion combined with a rise in the cost of Polkadot’s DOT. KSM increased from a low of roughly $1.50 at the beginning of the year and increased significantly as a result of Polkadot’s mainnet launch, to more than $70 by year-end.

Moreover, KSM was first distributed through airdrop to accounts that bought DOT tokens from Polkadot. The Kusama Market cap is $298,760,202 with 8,470,098 KSM in circulation with no set limit to its prospects.

Benefits of the Kusama Coin (KSM)

• The KSM coin is the major tool for the running and maintenance of the Kusama Network.
• Users who acquire and stake KSM have the option to vote on network enhancements, with each vote being based on the amount of KSM they have staked.
• Based on how many tokens they are staking, Kusama compensates users with freshly created KSM, with validators and nominators earning incentives.
• Based on its market capitalization, KSM has high liquidity.

Risks to watch out for

• KSM’s supply is unrestricted and it is anticipated that new KSM coins would perpetually be issued at a set inflation rate of 10%.
• Investors with a keen interest in tokens that have capped maximum supply may need to be careful of the KSM inflation rate.
• KSM had a significant price drop down to -91% over the past year due to the ravaging bear market.

Is Kusama Coin (KSM) a good Investment?

In the short term, when the market is on the bull run, Kusama is a wise investment. New projects typically outperform other well-known projects by a wide margin when the crypto market as a whole is booming. However, it is advised that investors be cautious in investing and carry out due diligence with extensive research because these tokens often take a downward trend during bear markets.

As the most productive testnet currently available, Kusama coin (KSM) has established a distinctive place for itself in the market. The fast pace and frequently chaotic nature of the Kusama chain create interesting and exciting opportunities for both investors and customers.

The Kusama Coin (KSM) provides users access to cyber securities, performs validator setup, establishes parachains, engages in governance or on-chain elections, yield farm on Parachain layer one (L1), and a host of other use-cases. The fact is KSM remains attractive to investors and has strong prospects.

How to Own KSM?

To own KSM, you can use the services of a centralized crypto exchange. Start by creating a Gate.io account, and get it verified and funded. Then you are ready to go through the steps to buy KSM.

Recent Development on KSM

• The Kusama coin is on the trajectory of expanding Polkadot. As future Polkadot projects’ use cases increase, the value of the KSM token will rise.
• The price of KSM has increased as a result of all the up-to-date improvements, successful partnerships, and the development of a sizable smart contract ecosystem. There will undoubtedly be enormous advancement in the coming years.
• Crypto analysts predict that the price of KSM would experience a dramatic increase, reaching an all-time high of $10,000. It is predicted that by the last quarter of 2025, KSM price might reach $7500 to $8200 if optimistic market sentiment and momentum are strong enough, combined with the Kusama ecosystem growth.
• Polkadot’s Governance v2 has emerged in the Kusama network.

Useful References

For the latest updates about Kusama, you can visit:

• The official website
• Twitter
• Discord
• Reddit
• GitHub

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