Kusama: everything you need to know about KSM

What is Kusama?

Kusama is a blockchain and cryptocurrency that was launched as an experimental network. The network was introduced in 2019 and is based on Polkadot technology. Kusama serves as a testbed for new blockchain ideas and experiments before they are implemented on Polkadot.

The Kusama network offers fast transactions, high security, and scalability, intended as a platform for decentralized applications (dApps), decentralized finance (DeFi) applications, and other blockchain-based innovations. Kusama has its own cryptocurrency, KSM, which serves as the native token of the network, used for conducting transactions and securing the network.

How does Kusama work?

Kusama is built on the Polkadot network and operates based on a combination of various technologies and design principles to provide an experimental and innovative blockchain network that is secure, scalable, and interoperable.

Kusama employs a hybrid consensus algorithm to ensure network security and decentralization. This hybrid algorithm combines Proof of Stake (PoS) and Nominated Proof of Stake (NPoS) to validate and produce new blocks. KSM holders can stake their tokens as collateral to validate and secure the network, earning rewards in return.

Kusama's governance system features a unique system of referenda and proposals, allowing token holders to vote on significant issues such as network upgrades and policy changes.

Kusama delivers high performance and scalability, enabling fast transactions and high throughput. The network employs a robust security architecture to prevent attacks and other security issues.

The Kusama token

The KSM token is the native token of the Kusama network and serves various functions within the network. Users can stake their KSM to become nominators, who then select validator nodes to validate and produce new blocks, earning rewards in the form of KSM tokens.

KSM tokens are also used to pay transaction fees on the network and grant voting rights on important decisions regarding the network's development, such as network upgrades and policy changes.

Additionally, KSM can serve as an investment or trading instrument, subject to price fluctuations based on supply and demand. KSM can be traded on cryptocurrency exchanges and used as a means of storing value or for speculative investment.

The Technology Behind KSM

The technology behind Kusama shares similarities with Polkadot. What are the key technical elements of KSM?

• Parachains: These are individual blockchain networks that exist alongside each other on the same network. Each parachain can have its own consensus algorithm, token economy, and functionality. Parachains enable developers to build and deploy new applications on the Kusama network without the need to create an entirely new network.
• Consensus Algorithm: Kusama uses a hybrid system of Nominated Proof of Stake (NPoS) combined with aspects of Proof of Stake (PoS) and Proof of Authority (PoA). Nominators select validators, and these validators validate transactions and produce new blocks. This algorithm is designed to ensure network security and decentralization while achieving high throughput and efficiency.
• Bridges: These bridges provide interoperability between different networks, allowing the exchange of value and data between different blockchain networks.
• Governance: The governance system includes voting rights for KSM holders, along with a unique system of referenda and proposals that enable the community to vote on important issues.
• Security: The network utilizes multiple layers of security, including a scalable consensus layer, a security module for detecting abnormal activities, and a governance system that offers transparency and accountability.

The Kusama ecosystem

The Kusama ecosystem consists of the Kusama network, developers, users, parachains, communities, and tools. The network is designed to test new blockchain ideas and experiments, providing developers with access to a wide range of tools and resources. Users can store and transfer value, execute smart contracts, and participate in platform governance. Parachains facilitate specific functions and applications, and user and developer communities contribute to the ecosystem. Various tools are available to support these communities. Together, all these elements within Kusama create an innovative ecosystem with fast transactions, high security, and democratic governance.

Benefits of Kusama

What advantages of Kusama make the cryptocurrency popular among its users?

• High scalability without sacrificing speed
• Flexible access for developers
• Incorporates multiple blockchains for efficiency
• The network serves as a test environment for Polkadot applications
• Governance system with threshold voting for fair outcomes

Drawbacks of Kusama

What disadvantages of Kusama should investors consider?

• Strong competition
• Increased security risks due to experimental projects
• Uncertainty regarding the current and future features of the platform

Who is the founder of Kusama?

The founders of Kusama are the creators of Polkadot: Gavin Wood (also a co-founder of Ethereum), Peter Czaban, and Robert Habermeier.

Gavin Wood's background is noteworthy because he invented Solidity, the programming language developers use to write decentralized applications on Ethereum. He was also the first CTO of the Ethereum Foundation and previously worked as a research scientist at Microsoft. In 2015, Wood founded Parity Technologies, which maintains Substrate, a software development framework used by Kusama developers building dApps.

Price forecasts

In 2026 experts expect a minimal price of €59.90 and a minimal price of €198.00 in 2031.