Author: Crypto Briefing, research institutions, asset encryption
Kusama is Polkadot’s cutting-edge network. The current valuation of Polkadot has reached US$4 billion. We expect that Kusama, which has a market value of approximately US$300 million, will also experience similar explosive growth.
Currently, users can purchase KSM tokens from multiple cryptocurrency exchanges. The cryptocurrency exchanges that have launched KSM tokens believe that the information can be viewed, but if you want to buy KSM, we recommend that the preferred cryptocurrency exchange is Kraken, and they are also One of the most well-known exchanges in the cryptocurrency market.
Information at a glance
The current price of asset code KSM is $33.40 The market value is $300,246,428 The highest purchase price is $55.50
Disclosure of financing information
*Kusama has received financial support from the Polkadot team.
Circulating supply 8,980,098 KSM total supply 10,000,000 KSM top ten address pledge rate 22% historical high price $59.53 (September 3, 2020) 30-day average price $30.2324 hourly transaction volume $23,131,235 30 day average transaction volume $31,719,317
Introduction
For any cryptocurrency project that wants to be successful, ecosystem development is the most important component. We often see excellent teams develop many exciting products, but these products are difficult to attract users in the market. Especially when it comes to Layer 1 solutions, although network throughput and scalability are not a problem, many so-called ” Ethereum killer ” applications have still not achieved the expected results, let alone the formation of an ecosystem.
Ethereum has attracted many extremely talented developers who develop various products and services on the blockchain, but if we want to see the widespread adoption of blockchain technology in the future, then this scenario must be ” “Multi-chain” means that other blockchains competing with Ethereum also have a chance of success-of course, only a few may survive in the end.
At this stage, in addition to Ethernet Square, only a few blocks chain has a healthy and growing ecological system, which was undoubtedly the most exciting Boca (Polkadot). However, many cryptocurrency enthusiasts do not seem to realize the importance of the Polkadot network, but in fact, Polkadot is already the second most popular blockchain network for developers, second only to Ethereum. Although Polkadot has not yet been fully put into production, its ecosystem is already booming, and many encryption projects hope to choose Polkadot.
It should be noted that it may take six to eight months for the Polkadot team to launch all the main functions required for the full operation of the network, but the project already has a fairly high valuation (approximately US$4 billion) and is encrypted on CoinMarketCap Ranked eighth in the currency rankings.
It is worth mentioning that there is a way to invest in the Polkadot ecosystem without directly investing in Polkadot. It is Polkadot’s sister chain project, Kusama, which looks very exciting. Kusama is an early experimental version of Polkadot and exists as an independent chain. More importantly, the development team behind the project is the development team behind Polkadot, as the team said:
“Kusama is developing very fast and slightly wild, which is very suitable for bold attempts and early deployment, while Polkadot is more conservative, putting stability and reliability in the first place.”
In fact, this means that everything that is going to happen on Polkadot will happen on Kusama first, and the projects planned to be launched on Polkadot will also be launched on Kusama first — many people don’t realize that Kusama is more than just a The gateway to Polkadot is an independent network with its own advantages, including:
- Kusama optimizes its power and talents to speed up the upgrade speed;
- Kusama network cost is lower;
- Polkadot plans to become a network for deploying enterprise-level applications, so transaction security needs to reach the bank level, which leads to too long deployment time. Kusama is more flexible, lower cost and can be quickly put into production, so there is a great opportunity Become “the real Polkadot.”
By the end of this year, many Polkadot projects will be launched on the Kusama network, which has aroused more interest in its ecosystem.
Understand the difference between Polkadot and Kusama
Both Kusama and Polkadot use the same ” Substrate technology ” to enable developers to build application-specific blockchains. This application-specific blockchain is also called a parachain, but so far there is no Put into production and deploy online. The current market value of Polkadot is approximately US$4 billion, while the market value of Kusama is “only” US$282 million. Such a huge difference (more than ten times) indicates that the market underestimates the value of Kusama.
In most cases, investors do not understand the difference between Polkadot and Kusama. Some people even think that Kusama is just a testnet for Polkadot, but this is actually a misunderstanding. Of course, this misunderstanding is understandable. After all, this may be the first such situation in the history of encryption, that is, a project starts two independent networks with different priorities. However, this actually provides profit opportunities for investors familiar with Polkadot and Kusama.
As the development team behind Kusama said:
“Kusama is developing very fast and slightly wild, which is very suitable for bold attempts and early deployment, while Polkadot is more conservative, putting stability and reliability in the first place.”
Polkadot advantage Kusama advantage High stability Parachain deployment entry barriers are low, high security Lower margin requirements for validators and parachains, governance and upgrades are more punished, lower rewards for validators, higher iterations and faster-technology update wave Card use cases Kusama use cases Enterprise and B2B applications Start-up online financial applications in the early stages of exploring new ideas Experience projects that require bank-level security, stability and robustness High-value applications that do not require bank-level security, stability and robustness applications The upgrade path of early applications wants to experience the application of Polkadot’s quasi-production environment
Polkadot vs Kusama,
Indeed, some projects started from the Kusama network and then put into production on the Polkadot network, but this approach is not necessary. Due to its own advantages, many projects will still choose to stay on the Kusama network.
The first advantage that the Kusama network can provide is speed (note, not blockchain throughput). Kusama’s governance efficiency is also faster, which will promote many projects to quickly implement new upgrades and developments, because they have the latest technology Developers can deliver products quickly. From this perspective, Kusama is faster to adapt and develop than Polkadot. It is reported that the Kusama parachain is expected to be launched at the end of this year, and the Polkadot parachain release may take six to eight months.
Another important advantage of the Kusama network is that it allows developers to deploy their own projects at a lower cost . As the Kusama network binding requirements are lower than Polkadot, and the parachain goes online faster, many developers have already looked at Kusama. Work is an ideal place for project deployment. In contrast, Polkadot’s parachain slot is very expensive, and the development team may have to invest millions of dollars in expenses. Although there are already many encryption projects in the Polkadot ecosystem, considering the cost issue, some projects are no longer considered to be put into production on the Polkadot blockchain-compare with Kusama, if there is not much between the two Differences, why spend more “wonder money”?
It is worth mentioning that if the Kusama team changes their project name, for example, to “Poca 2” (or other names that contain the word Polka), its valuation may become higher. At present, Polkadot has established brand awareness in the encryption industry, but Kusama may have to build the brand from the ground up , and let more people understand this project through education and training.
However, as Kusama launches the parachain in the fourth quarter of this year, this information asymmetry may disappear, which will further increase Kusama’s market valuation.
The launch of Parachain will make Kusama a “game changer”
Polkadot’s architecture mainly consists of several core components, such as relay chain, parachain and bridge chain.
Polkadot architecture,
The relay chain is the core main chain of Polkadot and Kusama, but its functions are very limited because the relay chain supports relatively few types of transactions, such as governance mechanisms, parachain auctions, etc., and it does not yet support smart contracts. Parachains are connected to relay chains, and most of the calculations that occur on Polkadot will be delegated to specific parachains. Parachains also have no restrictions. Some of them may be application-specific blockchains, and some may provide specific functions, such as smart contracts or privacy. For example, one chain can replicate Ethereum’s MakerDAO on the network, while another can provide smart contract functions used by other projects in the Polkadot ecosystem.
However, what is happening on Polkadot and Kusama is that the real active blockchain is a relay chain, which means that you can’t actually do much on the Polkadot network except for transferring tokens back and forth. However, with the launch of the new parachain, the Kusama network will function. Many projects have made it clear that they intend to launch their own parachains on Kusama, including:
- Acala—This is a cross-chain DeFi hub and stablecoin project;
- Chainlink—This is a decentralized oracle network;
- Phala Network—This is a confidential data exchange protocol;
- Polkaswap—This is the first automated market maker exchange (similar to Uniswap) on the Polkadot blockchain;
- Moonbeam—This is a decentralized smart contract platform that supports DApp.
According to data from the Polkaproject website, there are currently more than 280 projects on the Polka blockchain, but all of them must join the Kusama ecosystem before they can go online on the Polka network. It is understood that the Kusama parachain should be put into use in the fourth quarter of 2020, which means that the time to go online is coming soon. But the problem is that not every project can get Parachain slots because of the limited number of slots. For example, Polkadot plans to have no more than 100 slots in the medium term, and the number of slots provided by the Kusama network is similar.
Considering the limited number of projects and slots to become parachains (it may be only a few at first), the market demand for KSM tokens may be high. Parachain n slots will be auctioned in a license-free candle auction. To obtain slots, the project party must lock up (bind) a certain amount of KSM tokens for 6 to 24 months (the deposit will be refunded at the end of the ranking period), which means that the rental cost of each slot will be completely determined Due to the market supply and demand, the demand is bound to be greater due to the large number of project parties that want to participate in the auction.
For those project parties who do not have enough funds but want to participate in the auction, they can raise funds through the initial parachain offering (initial parachain offering) crowdfunding module, and KSM token holders will provide loans to these project parties. In other words, quasi-parachain candidates can ask retail investors to provide financial support for specific projects, and the KSM they invested will also become a token bond.
This model may provoke Kusama’s ” first parachain issuance ” wave, which feels very similar to the ICO on Ethereum in 2017. In fact, one of the biggest functions of a limited number of slots is the ability to filter out items that do not bring any value to the ecosystem.
In general, the introduction of parachain not only enables Kusama to become a ” functional network ” with extensive network functions, but also helps reduce the supply of KSM tokens in circulation-these two factors will bring positive effects to the evaluation of the Kusama project influences.
KSM token technical analysis
Technical analysis shows that the KSM token trend is currently in a larger symmetrical triangle pattern in various time frames, which indicates that a powerful directional breakthrough is approaching. Once the price breaks out of the triangle pattern, the Kusama token may “run away” in the direction of $55.50.
Kusama token price trend,
to sum up
In most cases, many investors in the cryptocurrency field do not know much about the Kusama project, but with the launch of the parachain, it is expected that the entire crypto community will have more interest in this project. At the same time, the valuation gap between Polkadot and Kusama will be further narrowed, and people will gradually realize that Kusama is not just a “sister chain” of Polkadot.
Because developers can get more benefits from Kusama, the potential scale of the network can even rival Polkadot. Parachain may be launched soon, so we think it is a good choice to invest in Kusama in November.
Note: The author of this report has invested in Bitcoin and Ethereum.
