There are many decentralized finance (DeFi) projects being developed in the cryptocurrency space today. While most of these projects turn out to be successful, there are some others that fail before they even scale up. Usually, they are caused by problems in their respective networks, only to be discovered when it is too late. The Kusama project began as a way to address that.
Kusama is Polkadot’s “canary” network. It was created to run decentralized applications (dApps) that are yet to be deployed on the Polkadot blockchain. But more than just being a testnet, the platform operates with real economic implications. This distinguishes Kusama from the usual understanding of how testnets operate.
Background
Dr. Gavin Wood, founder of Kusama, conceptualized the whole initiative from the need to strengthen the capability of the Polkadot network to support innovative dApps. Kusama was designed as a blockchain running in parallel with Polkadot.
Dr. Wood envisioned Kusama to be a mainnet-like testnet that will function as an early warning and problem detection tool. Its model implements realistic conditions on every application deployed in it, with the objective of discovering the weakness of Polkadot’s database even before dApps run on the mainnet.
Before any new feature or protocol is deployed on the Polkadot chain, they can undergo realistic experimentation through the Kusama network.
What is Kusama?
Kusama is a parallel blockchain running along the Polkadot main chain. Its primary purpose is to serve as its canary network, focused on helping out the community and its developers in testing out future implementations on the main Polkadot chain.
Kusama is powered by parallelizable chains (parachain), and is considered a much simpler form of blockchain secured by “relay chains.” The relay chains also serve the purpose of securing the communication between other parachains. This helps Kusama execute multiple parachains for developers without the potential for collision and without too much cost on security.
Features of Kusama
To make way for a platform that can simulate realistic conditions for developers, Kusama allows them to develop their own, specialized blockchains backed by a codebase similar to that of Polkadot. The following are some of the main features of the Kusama project:
- Quick Development – Running on parachains allows developers to test out all possible implementations of their dApps or other projects. Because they can easily make governance decisions and upgrade deployments, they can develop their projects faster before they are finally sent to the mainnet for everyone’s use.
- Accessible – Developers can conveniently create their own blockchains without much cost on their end. Because it works on parachains, securing their own chains also does not come at an expensive cost.
- Advanced Technology – The parachains that Kusama implements can run independently and parallel with each other. Kusama’s sharded and multichain network lets developers take advantage of real blockchain conditions before they implement their projects on Polkadot.
- Open Governance – Kusama’s governance is decentralized. It has its own community that is in charge of controlling the direction of the whole network. Through a voting system powered by its own native token, anyone can take part in plotting the roadmap of the network.
Parachains
Parachains refer to application-specific data structures that can be considered “smaller” chains from the main chain. Through parachains, developers can build independent networks that can run with the same code as that of their parent chains. Parachains also operate in parallel with their original networks.
Kusama’s parachain is secured by validators who also run the Polkadot Relay Chain. And because these chains are running on top of the Polkadot blockchain, they enjoy the transaction throughput and scalability that the parent chain features on its own mainnet.
Working with validators are “collators.” These are nodes that perform the maintenance functions for specific parachains. What they mainly do is store each parachain data, formulate new block candidates, and assist the role of validators in verifying and recording the status of the parachain.
Overall, since parachains are almost considered independent chains, developers can create an independent economy running on top of it. They can even go as far as minting their own native tokens on their individual parachains.
KSM Token
Kusama’s native token is KSM. KSM can be used as a medium of exchange within the network, to perform network validation or nominate validators, back parachains and parathreads, and vote on Kusama’s governance decisions.
Staking
KSM holders are given the ability to stake in the network through its consensus model. Kusama’s Nominated Proof-of-Stake (NPoS) model allows stakers to become validators of the network through a regular selection process. They are chosen from a set of nominees who are also backed by other stakers.
There is a minimum number of KSMs that each user has to stake to be considered a candidate for a validator set. Then, Kusama follows the Phragmen algorithm in making sure that the election of validators are not chosen just by the amount of the stake backing their nomination.
The algorithm looks at the following metrics in balancing the weight of the stake between each validator nominations:
- Total tokens staked by the nominee and the nominators backing them;
- Stake of the least-staked validator; and,
- Variance of the stakes in a set backing the nominee.
Right now, there are more than 130 validators who are working to maintain the health of the Kusama network.
But more than the whole Kusama network, parachains power the features of the whole project altogether.
Governance
One feature that separates the Kusama project from other testnets is its governance feature. Usually, voting functions are not yet implemented if it isn’t a mainnet. With Kusama, KSM holders can vote on every protocol update, feature implementation, and code revision, among others.
Composing Kusama’s governance system are token holders and the Kusama council. Its governance model implements an on-chain voting system and stake-weighted decision making features to involve its community in important governance referenda. But how does Kusama do this? Here is the process followed before anything new is implemented on the Kusama platform.
- Proposal of Referenda – This refers to governance proposals targeted at performing specific functions on the platform. It can also refer to the will of the people who are calling such a referendum on anything that they want to implement on the network. The referenda also serve as a privileged function call. Furthermore, there is a limited period for the voting process that a referendum has to abide by.
- Referendum is Submitted – After the creation of a referendum, they are submitted to Polkadot (DOT) token holders and its Council. The technical committee behind Kusama can also propose a new referendum based on their observations on what the platform needs, but only after it is approved by the Kusama Council.
- Voting Process – The voting process gives KSM holders the voice to either disagree or agree with a proposal through “aye” or “nay” votes. Proposals that earn a majority vote can be passed for a succeeding implementation. To secure the referenda, however, there is an enactment delay where KSM holders are also required to lock their tokens. This system avoids the likelihood of KSM holders selling their votes on a particular referendum and ensures that any referenda have enough buy-ins before they are implemented.
Conclusion
To create a fully-functioning application or to test out a successful, new feature on a blockchain’s mainnet can be a tedious, lengthy, and costly process. This can affect the development of many projects in the DeFi space. A testnet that is almost similar to its mainnet but implemented with real economic conditions can be an effective environment to develop new projects.
While Kusama is not a risk-free testnet since decisions on the platform can come with real implications, this can also be a powerful incentive for developers to build new dApps or test out new features. The risk that testing on the platform entails also include that possibility that they can earn rewards for doing so.
But all in all, perhaps the greatest benefit from a realistic mainnet such as Kusama’s is that it can help build a stronger network. Through a canary network, any feature can be comprehensively tested before they are deployed on the Polkadot mainnet.