Coin Guide: Kaspa ($KAS)

Newly-launched Layer-1 blockchain network Kaspa has been one of the biggest gainers of 2024. Kaspa rose to all-time highs this year off its unique blend of security based on the Proof-of-Work consensus mechanism, paired with fast block processing and transaction confirmation times. With its unique value proposition and commitment to scalability, Kaspa is being tipped as one of the next major players in the L1 sector. 

Kaspa uses the GhostDAG protocol to provide an impressive degree of scalability, decentralization, superior throughput, and instant transaction finality. If you’re interested in the future of Layer-1 blockchain technology, Kaspa could be a solid addition to your watchlist. 

This guide will give you the full scoop on Kaspa and its native $KAS token, and how to buy it on Houdini Swap. 

What is Kaspa?

Kaspa is a decentralized peer-to-peer cross-border payments network and Layer-1 blockchain that adopts the Proof-of-Work consensus mechanism from Bitcoin, not to mention its UTXO model, deflationary tokenomics, and lack of premine and centralized governance.

It diverges from Bitcoin’s linear blockchain architecture with its blockDAG (Directed Acrylic Graph) implementation.

The latter enables parallel block creation and ordering. The protocol consists of GhostDAG, which enables fast block creation and validation, as well as PHANTOM, which sorts constructed blocks.

Kaspa’s unique architecture allows multiple blocks to exist in parallel, enabling greater throughput by fixing the problem of blockchain technology’s high orphan rate. 

A brief history of Kaspa

Kaspa was initially founded by DAGLabs, a crypto development lab helmed by founder Yonatan Sompolinsky. DAGLabs was founded in 2018 and received $8 million in a funding round led by Polychain. After Kaspa launched in 2021, DAGLabs was wound up, devolving ownership of the project to the community. 

The Kaspa mainnet went live on November 7th 2021, with the genesis block being created the following November 8th. A major bug caused a crash several weeks later on November 21st, which was remediated by reverting to a checkpoint block with data sourced from nodes prior to the crash.

A new genesis block with a UTXO set identical to the checkpoint block was produced, while the project team issued cryptographic proofs to address investor concerns about premining by way of timestamp manipulation.

Kaspa hardforked last April 14th 2022 to address the issue of side chains spamming the network, with non-compliant nodes being booted off the network. Since then, Kaspa has been undergoing regular performance updates, as well as hitting milestones such as launching its dedicated self-custodial wallet Kaspium in September 2023. Most recently, Kaspa launched Testnet 11, a proving ground for Kaspa’s attempt to rewrite its codebase into Rust. Testnet11 is performing stress tests as Kaspa attempts to increase block time to ten blocks per second, on its way to achieve the ultimate goal of 100 BPS in the near future.

Who founded Kaspa?

Kaspa was conceptualized by blockchain research and development company DAGLabs, backed by a consortium of investors led by Polychain. Since Kaspa launched in 2021, the project has evolved into a community-led project with no central authority or business model. 

The project was founded by Dr. Yonatan Sompolinsky, a Harvard University Postdoc CS, as well a member of the MEV Research Team. Sompolinsky’s contribution to blockchain technology was evidenced by his 2013 paper on the GHOST protocol, which was cited in the Ethereum whitepaper.

What are the tokenomics of Kaspa?

The platform’s native token $KAS was fair-launched in November 2021, without pre-sales or coin allocations. Currently, the maximum supply of $KAS tokens is 28,704,026,601, with the emission schedule undergoing a halving annually. This means Kaspa’s block rewards will be halved once a year at a smooth monthly reduction figure. 

Since launching, $KAS has recorded upwards of a 77,000% gain at its all-time high set last August 1st 2024 since the token launched in July 2022.

What are the key features of Kaspa?

Kaspa was developed to solve the trilemma in the usage of digital assets: Security, Scalability, and Decentralization. Utilizing a revolutionary blockDAG as opposed to blockchain, Kaspa allows the fastest, scalable, and most secure transactions with absolutely no sacrifice to decentralization.

Kaspa distinguishes itself from other Layer-1 blockchain networks with the following list of key features: 

• GhostDAG protocol. Kaspa’s use of the GhostDAG protocol enables parallel blocks to coexist and be organized in consensus through the blockDAG approach. This enables secure, fast transactions while maintaining high block rates. Kaspa’s goal is to reach upwards of 10 blocks per second, making it even more scalable than other L1 blockchain networks 
• Fast transactions. The blockDAG approach generates multiple blocks every second to be posted to the ledger. Paired with fast transaction completion within 10 seconds, Kaspa is an ideal choice for daily transactions and interactions with the blockchain. ****. 
• Instant transaction finality. Kaspa was developed to be 100x faster than Bitcoin. Each on-chain transaction is visible to the network within one second, and each transaction fully confirmed within 10 seconds on average.
• Maximum scalability. Kaspa’s ability to generate and confirm parallel blocks per second answers the scalability problem of the blockchain trilemma—without sacrificing security and decentralization in the process. 
• Efficient PoW consensus mechanism. Kaspa uses the kHeavyHash algorithm to secure the network and reach consensus. Paired with the network’s scalable and high-throughput blockDAG architecture, Kaspa has limitless potential for throughput while remaining less energy-intensive than other proof-of-work based networks.
• Optimal security posture. The blockchain leverages a high-security network without compromising on decentralization and scalability with its Proof-of-Work GhostDAG architecture. 

What are the use cases of Kaspa?

Kaspa’s superior speed, security, and scalability opens the door to endless possibilities for use cases such as the following: 

• An attractive platform for dapp development. Kaspa’s scalability and high throughput makes it a highly attractive platform for building decentralized applications that can handle high transaction loads without slippage or latency. This opens the door to a variety of blockchain games, decentralized finance protocols, decentralized social networks, and marketplaces built on Kaspa’s robust infrastructure.
• ‍Support for cross-border micropayments. Kaspa’s low fees and fast transactions make it an ideal platform to effect micropayments. For instance, users can easily tip their chosen content creators, buy digital assets, or pay for everyday expenses with minimal gas fees. The $KAS token’s price action from 2023 until its peak in August 2024 is proof positive of its vast potential for this use case. 
• Greater potential for mass adoption. The platform’s emphasis on high performance, scalability, and decentralization gives it an advantage over older, slower, and more heavily congested PoW blockchain systems. That positions Kaspa as an ideal PoW with the capability to support complex protocols and push the envelope of what blockchain technology can achieve. 
• Decentralized P2P digital currency. Kaspa is perfectly suited for day-to-day use as a digital P2P currency, with fast, instant transactions and support for micropayments in seconds.
• Potential to support bulk transactions. Kaspa’s goal is to compete with TradFi financial systems like Visa and MasterCard with its potential to support up to 100 blocks per second.
• Smart contract integration. The blockchain is planning to integrate smart contract functionality, allowing it to support a wider range of use cases in the future. 

How to store $KAS tokens?

You can use a variety of wallet options to store $KAS tokens. Here are some popular wallets that allow you to store, secure, and manage your Kaspa tokens:

• Official Kaspa Web/Mobile Wallet. Kaspa’s official Web/Mobile wallet is the most-user friendly wallet available on the market right now.
• KDX. KDX process manager offers a way for users to install and configure the Kaspa full-node software as well as the Kaspa wallet. If you prefer to store $KAS on a desktop, KDX is a solid choice offering effortless installation and zero configuration.
• Official Kaspa Command Line Wallet. A command line Kaspa wallet is also available as part of the official core Kaspa node software bundle. 
• KaspaNet. KaspaNet is a convenient web-based wallet specially designed to store Kaspa tokens for expediency. 
• Kaspium Wallet. Kaspium is a self-custodial wallet that supports biometric authentication. This option is suited for long-term storage and is available on desktop, web, and mobile devices.

What dapps can you use with Kaspa?

Kaspa is at its embryonic stage. That means there are no smart contracts, dapps, Layer-2 scalability solutions, or tokenization systems yet. However, the rewrite of the blockchain in Rust lays down the foundation for more complex, advanced functionality. 

Thus far, Kaspa features several utilities and applications, particularly when it comes to wallet solutions and network metrics tools 

• Kaspa Block Explorer. Kaspa Block Explorer is a robust utility for viewing the latest network metrics, such as tokenomics supply data, mining info, market data, and a constantly-updated feed of blocks and transaction histories.
• Kaspa Graph Inspector. Kaspa Graph Inspector presents an ongoing feed of mined blocks, connectivity information, and other relevant information.
• KasBoard. KasBoard is a full-featured network analytics, live data monitoring tool, and interactive visualization web app.

What are the future prospects of Kaspa?

Kaspa’s future prospects are bright entering 2025 and beyond. As evidenced by its pivot from GoLang into RustLang, Kaspa is positioned for a major performance enhancement and the potential to support limitless transaction throughout starting at 10 blocks per second and a long-term target of 100 blocks per second.

The transition to Rust places Kaspa squarely at the forefront of blockchain scalability—especially as far as proof-of-work blockchains are concerned. Another major catalyst for Kaspa’s potential parabolic growth is its consensus upgrade to DAGKNIGHT, which will further enhance the blockchain’s security posture and responsiveness.

Kaspa is also mulling the possibility of enhancing block generation rates, which would drastically accelerate transaction confirmation speeds and open the blockchain up to the possibility of supporting use cases requiring instant transaction finality.

This comes in handy with Kaspa’s goal of integrating smart contract functionality. It is expected that the latter will unlock the blockchain’s capacity to accommodate a variety of DeFi, dapps, and Layer-2 scalability solutions built on top of the Kaspa core PoW and high-performance infrastructure. While Kaspa has a long road to go, its early performance and meteoric rise indicate a very bright future as a future major contender within the competitive L1 and broader crypto landscape. 

It is therefore no surprise why analysts are bullish about Kaspa’s future prospects regardless of the direction it takes.

Whether it becomes a leading dapp platform or used as a frictionless cross-border payments provider, Kaspa’s place is secure as a project to watch in the coming years.

Kaspa ($KAS) is available on Houdini Swap.