kusama was created by dr gavin wood who is also one of the co-founders of ethereum if the name sounds familiar that’s because gavin is also the founder of polkadot kusama is referred to as a quote canary network this is a reference to the canary bird which was used by coal miners as an early warning signal for toxic gases in the air underground to that end kusama exists as a means of testing the polka dot network under real economic conditions and almost every feature that will ever be added to polkadot will first be tested on kusama that said calling kusama a polkadot test net is not entirely accurate because unlike regular test nets kusama is intended to exist as its own network long after polkadot is finished.
Now gavin expects both projects to evolve differently given that kusama is focused around experimenting with economic incentives and pushing the network to the limit while r d stands for research and development on polkadot on kusama r d stands for risk and danger kusama was soft launch in august 2019 and officially went live at the end of october that same year this rollout served as a dry run for polka dot’s own main net launch which took place between may and august of 2020 when it comes to what’s under the hood kusama is basically a carbon copy of polka dot with a few key differences . for starters kusama’s code has not been audited kusama’s governance process is also four times faster than polka dots to allow for faster upgrades to the network on polkadot one percent of any unused treasury funds is burned whereas on kusama 0.2 percent of any unspent treasury funds go to the members of kappa sigma mu now kappa sigma mu is a quote economic game to incentivize users to join a society that coordinates around whatever the rules are decided to be the current rules dictate that to become a member of kappa sigma mu you must get a permanent tattoo of the kusama bird now if you’re wondering why anyone would be crazy enough to get a tattoo to join a crypto society it’s because that 0.2 percent of treasury rewards works out to around over 225 000 per month since there are currently only 50 members of kappa sigma mu that means four and a half thousand dollars per member per month not surprisingly kusama’s crypto society made the news last year but it seems to have been the only time kusama has been in the spotlight ever since the project launched in 2019.
Now if you want to join kappa sigma mu i’ll leave a few links in the description that can help you do just that just as long as you’re not afraid of needles of course now about that ksm coin unlike polka dots dot kusama’s ksm never underwent a 100x redenomination this means ksm’s initial supply is still just 10 million around 9 million ksm is currently in circulation however since 50 of ksm’s supply is currently being staked this works out to an actual circulating supply that is closer to four and a half million speaking of staking ksm has an inflation of 7.5%/Year which is not bad as far as inflationary cryptocurrencies go it’s also worth pointing out that any staked ksm has a seven day unlock period this means if and when ksm goes parabolic the ksm that is being staked won’t be making it to the exchanges right away which could supercharge any positive price volatility on the other hand most of ksm supply seems to be held by just a dozen accounts with the largest wallet holding nearly eight hundred thousand ksm now although that’s only eight percent of ksm’s initial supply it’s nearly twenty percent of ksm circulating supply dumping even just half of the ksm in that wallet could seriously suppress a parabolic move still has one big advantage over many other altcoins from a technical analysis perspective because this is ksm’s first bull run there are no previous price points to serve as resistance moreover even though ksm currently has a price tag of over 110 dollars it still has a market cap of less than a billion dollars which means there is still a lot of room to grow if you want to try and estimate how high ksm could go well besides ksm’s tokenomics there is another reason why i’m bullish on kusama polkadot is supposed to begin rolling out its parachain loan offerings sometime this year now this is polkadot’s way of figuring out which project is worthy of a parachain slot on polkadot’s relay chain as far as i can tell the polka dot team is planning to pilot these parachain loan offerings on kusama .
First this means that some or possibly even all the projects that are currently competing to launch on polkadot will make their debut on kusama although many of these projects will eventually transition to polkadot kusama is where all their users will be until that day comes in short kusama may soon host a substantial amount of the users developers and projects in polkadot’s ecosystem albeit for a limited time i reckon that’s going to have one hell of an effect on the price of ksm but that’s not all remember that polkadot’s relay chain has a limit of 100 parachain slots.
Now what will happen to the projects that didn’t make the cut for polka dot well they’ll go to kusama now if that wasn’t bullish enough gavin wood has noted on many occasions that the team plans to bridge kusama and polkadot given that their networks are basically identical this bridge sounds more like a merge to me does this mean that kusama could grow to become just as big as polka dot from where i’m standing it’s a no-brainer now let’s see where thor chain is headed thor chain was founded in the fall of 2018 by nobody that’s right thoughtchain has no founder no ceo and apparently no concrete team either instead the developers working on thoughtchain are quote self-organized i imagine this sketchy origin story and setup is part of why we haven’t seen much about thor chain in the news on the bright side thought chain’s code has been audited multiple times now if you’re wondering how the project was funded i’ll get to that in a moment anyways thor chain is a cross-chain liquidity protocol in plain english this means that thoughtchain makes it possible to trade different types of cryptocurrencies without the use of a centralized exchange these swaps are quote lightning fast and cost next to nothing that said thor chain is technically not a decentralized exchange thortchain is intended to be the backend protocol for decentralized exchanges like uniswap so how does it work 4chain uses a proof-of-stake blockchain that was built using the cosmos sdk if you don’t know much about cosmos anywho you can think of thor chain as being a middle layer that makes it possible to swap between cryptocurrencies on different blockchains like bitcoin and ethereum how 4chain works is pretty damn complicated so put your thinking caps on because this is going to be a bumpy ride as many of you will already know.
Decentralized exchanges rely on liquidity pools to execute trades each liquidity pool on decks is like uniswap consists of two assets like usdc and eth the price of each asset is determined by the ratio of the assets in the pool for example if there are 10 000 usdc and 10 eth in a pool then each eath is worth one thousand dollars when someone buys one eath for 1000 usdc this increases the amount of usdc in that pool and reduces the amount of eth which gives the remaining 90th a higher price that i’m too lazy to calculate chain takes this idea to the next level by creating a series of liquidity pools consisting of a cryptocurrency from any blockchain and the roon token as with regular dex protocols anyone can provide liquidity to these thor chain liquidity pools and earn interest on those funds and arbitrage traders can profit by taking advantage of any discrepancies in the market price of the assets in those liquidity pools a network of anonymous nodes on the thor chain blockchain hold the assets in these liquidity pools in various faults and watch for signals from the two blockchains involved to execute the desired transaction for example if i wanted to swap btc to eth using thoughtchain i would send my btc to the appropriate vault along with some roon for fees for chain nodes.
would see this transaction and send me eth from the appropriate vault to my ethereum address keep in mind that this is what is going on behind the scenes the front end decks i would use to actually execute this transaction would make this a seamless process to ensure the thought chain nodes don’t steal from the vaults which hold the assets belonging to the liquidity pools they have to stake at least one million roon to run a node which is currently around four million dollars if thor chain nodes attempt to steal from the vaults they have access to they face extremely severe slashing penalties to prevent any sort of large-scale coordinated attack on the network roon’s tokenomics are designed such that the value of that rune being staked is always significantly greater than the total value on the thor chain protocol this is an extremely watered-down explanation of how thought chain actually works