KSM Coin

KSM Coin is the cryptocurrency of the Kusama blockchain, a public blockchain launched in 2019. One of the main developers of Kusama is Gavin Wood, the former CTO of Ethereum and the founder of Polkadot. The purpose of Kusama is to become the test chain of Polkadot, that is, before a new project or application is officially launched on Polkadot, it should be tested and run on Kusama, and then it can be launched on Polkadot after confirming that there are no problems. Therefore, Kusama’s blockchain design and working principle are very similar to Polkadot.

The common feature of Kusama and Polkadot is the adoption of relay chain and parachain architectures. The Relay Chain is the main blockchain responsible for ensuring the security and consensus of the network. Parachains are customized blockchains that can perform a variety of different functions and applications and utilize the resources of the relay chain to verify transactions. Interoperability can be achieved between parallel chains, that is, data and value can be transferred across chains.

The main difference between Kusama and Polkadot is the speed and flexibility of the governance system. On Kusama, it takes 7 days for a referendum vote and 8 days after the vote for changes to be implemented, while on Polkadot it takes a month. It is also much easier to become a validator on Kusama, as the minimum staking requirements are lower than on Polkadot. Kusama is an experimental blockchain that gives up some stability and security to increase network speed and innovation. Kusama tries to give developers more freedom and flexibility. While completing the design of the Polkadot project, they can test and adjust on Kusama.

Since Kusama provides looser rules and faster feedback loops than Polkadot, many projects that want to be released on Polkadot usually conduct similar testing on Kusama first12. For example: Polkadot’s planned MoonBeam smart contract platform will first launch on Kusama as MoonRiver2. Therefore, Kusama is often called Polkadot’s canary network, or “little Polkadot.”

Another feature of Kusama is parachain bidding and auctions. Since Kusama has a limited number of parachains, projects must obtain the right to rent parachains through bidding. The way the auction works is that projects must lock a certain number of KSM coins for up to 2 years and return these KSM coins at the end of the lease period. The project team can convince a large number of KSM holders to lend out their KSM coins for a fixed lock-up period in order to ensure they win the auction. Investors who lend KSM coins may be compensated in the form of the project’s respective tokens, a dynamic similar to what happened during the 2017 ICO boom. But unlike ICO, investors can get their KSM coins back after the lock-up period, which brings two benefits: First, it prevents lazy or fraudulent projects from providing any value in return. Investors cash out; second, investors can invest in new projects without actually having to spend any of their precious cryptocurrency.

The investment value of KSM coins lies in the fact that Kusama provides pre-production capabilities for the Polkadot network and focuses on promoting interoperability between the two blockchains. Kusama’s cryptocurrency, KSM Coin, plays a key role in the maintenance and operation of the Kusama network. Blockchain project developers can maintain parachains in Kusama and Polkadot, and use the Kusama parachain to experiment and test new features before upgrading the Polkadot parachain. In recent years, several projects have deployed parachains on Kusama and Polkadot, such as Gitcoin, which is a platform that provides developers with payment opportunities by linking them to open source projects; and 0x, which is a decentralized trading platform. Going forward, investors may well want to add KSM to their portfolios in the future if they believe in the future of the Polkadot ecosystem and the blockchain that underpins the applications.