After Ethereum’s merger and transition to the proof-of-stake (PoS) consensus mechanism last year, the market is not optimistic about the future of proof-of-work (PoW) coins. The PoW mechanism is generally believed to have severely limited scalability on-chain, even with iconic projects like Bitcoin. As the Bitcoin Ordinals protocol gained popularity earlier this year, many developers turned to PoW to develop smart contracts. Meanwhile, the market started paying attention to Kaspa, the fastest and most scalable Layer1 project built on the PoW consensus mechanism.
Kaspa aims to solve the blockchain trilemma by balancing decentralization, scalability, and high performance. The Kaspa community prioritizes decentralization, which is critical to the crypto community and blockchain technology. Therefore, the community is also dedicated to becoming a decentralized autonomous organization (DAO) that adheres to the PoW consensus mechanism.
Technically, Kaspa was founded by Yonatan Sompolinsky, an early developer and key Ethereum contributor. Kaspa also implements the GhostDAG protocol (improved version of the PHANTOM protocol) designed by Yonatan, and follows the Nakamoto Consensus. This allows Kaspa to achieve a higher number of transactions per second (TPS) without compromising security.
The current Kaspa mainnet generates one block per second, with each block capable of holding more than 400 transaction records. The current goal is to perform 32 blocks per second (BPS), with an ultimate goal of 100 BPS. Kaspa can process up to 18 blocks in parallel. By enabling parallel blocks, it also connects honest nodes through sorting by greedy algorithms, ensuring instant confirmation and network security.
Kaspa’s economic model
Similarly, Kaspa’s economic model is designed to be decentralized. Therefore, Kaspa is issued in a similar way to Bitcoin. Without any pre-mining or pre-sale campaign, all tokens can only be obtained through mining. In November 2021, the Kaspa mainnet was officially launched. Kaspa boasts a 100% fair distribution of tokens. Kaspa’s maximum supply is capped at 28.7 billion, which is expected to be mined within 186 months. In other words, the circulating supply will be released around April 2037.
In the spirit of the Nakamoto Consensus, the Kaspa community has adopted a deflationary monetary policy. For the first six months after the mainnet launch, Kaspa will generate 500 KAS per second, with 1,314,900,000 KAS to be issued each month.
Source: Official website of Kaspa
Starting from the seventh month, the monthly supply of KAS will be reduced by 12%. In addition, the monthly issuance of each subsequent month will be the KAS issuance of the previous month * (1/2)^(1/12), allowing for a stable halving of the total supply each year.
Formula of monthly issuance of KAS
Source: Official website of Kaspa
With a circulating supply of over 18 billion KAS as of April 21, 37% of KAS still remains to be mined, leaving plenty of room for miners.
KAS Market Data
Currently, KAS has a market capitalization of almost $460 million, ranking 10th among all PoW coins. But in the eyes of the miners, KAS is worth much more.
As a popular cryptocurrency for GPU mining, the KAS network has a hash rate that exceeds 1.14PH/s. By comparison, ETC, which ranks fifth in market capitalization, currently has a hash rate of 115TH/s. In other words, the network hash rate of KAS is almost 10 times that of ETC. As shown in the figure above, the current market capitalization of KAS is only 16% of that of ETC. Since most miners recognize the future value of KAS, many GPU miners are willing to transfer their hash rate to KAS.
According to CoinEx, the price of KAS has shot up 554.1% in the last six months and 293.74% in the last three months, making it one of the most stable coins in the last six months.
Overall, Kaspa is a public chain with a solid technical foundation and it also inherits the spirit of Bitcoin. In addition to taking advantage of the decentralized and secure architecture of Bitcoin, it makes better technological innovation in terms of scalability. Recently, Rusty Kaspa Alpha has been released. The Rust rewrite could not only improve the performance of Kaspa, but also enable the development of Layer2, smart contracts, and DeFi. Also, the community is diversifying the daily application scenarios of KAS.
All these efforts have paid off as Kaspa has gained high recognition from the market and numerous miners. But will he become a new PoW leader like most miners expect? It still needs to be tested by the market and applications.
Users can log in to CoinEx to exchange KAS tokens: https://www.coinex.com/info/KAS
Disclaimer: This article is for reference only and does not offer financial advice.
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