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What is Kusama? A Review and Short Analysis

What is Kusama? A Review and Short Analysis

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Summary

Founded by Kusama in 2019 Gavin Wood, founder of Polkadot, and former CTO and founder Ethereum. Kusama Network is referred to as Polkadot’s Canary Network, an experimental version of its “cousin network”: Polkadot.

Built on Substratum and operating independently of the Polkadot network, Kusama uses almost the same code base as Polkadot.

Kusama’s core task is to test the interoperability and scalability of functions and to organize these solutions into a network of parachains or parallel chains.

Kusama’s key metrics

(from 24/05/2021)

Ticker: KSM
Price: $324.38
Maximum supply: 10,000,000
Recycled supply (estimated): 8,470,098
Market cap: $2,677,178,636
Market value: #39
ATH: $595.25 (5/14/2021)
YTD Perf: +340.6%
1 year power: +4,767.6%
ROI: 19,102.95%
Bets Online: 5,427,300 (48%)
Return: 15.1%
KSM Key Metrics – 29 June 2021

Appreciating Kusama

Polkadot and Kusama aim to achieve the same goals from a Blockchain value-added analysis point of view, and are therefore considered similar in the following valuation proposal.

Both blockchain networks are built to enable Web 3.0, a decentralized and fair Internet where users have complete control over their data.

At a time when cross-chain assembly and scalability have never been more important, both networks are launching parachain auctions and bonds, a way to acquire tokens for parachain offerings where users can withdraw their invested tokens after retirement (end). rental period; 6-24 months.

The image below shows that the value of DOT is 10 times higher than its original Blockchain cousin Kusama. The value of a crypto asset is often tied to the fundamental demand of the platform, in this case Polkadot.

BTC market value $707 Bio
ETH market value $297 Bio
DOT Market Cap $21 Bio
KSM Market Cap $2 Bio
Market value of selected coins

According to the agency’s assessment, Polkadot is one of the best layer 1 protocols in the crypto-verse. It later experienced a meteoric rise to the top ten by market capitalization in just a few months.

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The study highlights the similarities between the KSM and DOT projects in the same way that LTC has been a separate witness fork of BTC in 2011.

DOT vs KSM Market Cap Size

Following the same approach, the chart below depicts KSM’s 5x value achieved when 1% of Polkadot’s market cap is diluted. In other words, Kusama is trading at a 600% premium to 1% of Polkadot’s market cap.

Risks

Technical risks:

To some extent, Kusama can be considered a test network with lower security levels than the Polkadot network. Early and still unaudited Kusama participants can take an active role in the network and participate in Kusama NPoS. KSM holders can also try chain management by proposing and voting on recommendations and becoming a member of the council.

Adoption risks:

KSM is designed to have only a certain number of slots available, around 100, although future optimizations (i.e. secondary relay chains) will increase this number even further. It has been reported that several Dapps need to work and perform as well or even better than their Ethereum counterpart.

Compliance risks:

When the Kusama Web was initially fully deployed, the Web 3 Foundation ceased to maintain fundamental control over it by removing a specific module. Governance will then move to a three-chamber model, namely a plebiscite, a council and a technical committee (Referendum Stake Weighted Participation), which incentivizes participants to hold and lock tokens for a predetermined period of time.

Kusama – Author’s opinion

Kusamma has a strong team of visionary engineers with decades of experience in computer systems, software engineering and security networks, and a globally rooted community that is expanding at the speed of light. Kusama has bright days ahead of him. The “Canary Network” positions itself as a scalable multi-chain network for innovation and an “early stage test network” for Polkadot deployment. The added value and benefits of this combination include:

– Less traffic congestion and a higher level of information security in the main network thanks to the fast possible iteration

– the ability to live as an independent community network

– completely owned and managed by KSM holders

– Low barriers to entry for deployment

-Low bond requirements for validators and parachains

-small penalties

Embracing the network of stakeholders and the development of coin management over the next semesters will give a clearer understanding of Kusama’s future and the obstacles it faces.

References (selection):

CoinGecko; Coin market cap; https://polkadot.js.org/; Weiss Ratings; Messer

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