Kaspa’s Evolution: Unveiling Strategic Initiatives and Technological Advancements
The ecosystem development related information within the research was supported by the Kaspa Ecosystem Foundation
Grayscale has released a list of crypto assets under consideration for potential future Grayscale investment products, as well as a list of crypto assets included in its existing products. These assets are classified into categories such as Currency, Smart Contract Platforms, Financial, Consumer & Culture, and Utility & Services. Among the crypto assets under consideration for potential future Grayscale investment products is Kaspa (KAS).
Since its mainnet launch in 2021, Kaspa has seen impressive growth. With a total supply of 28.7 billion KAS, its current market capitalization stands at approximately $3.4 billion. Backed by a strong and supportive community, Kaspa continues to climb the ranks in the blockchain industry. As part of its ongoing efforts to strengthen its ecosystem and community, Kaspa is set to launch a series of key events from September to November, including AFT 2024 (Sept 23–25), Kaspa Innovation Summit (Oct 27), and the Australian Crypto Convention 2024 (Nov 23–24). Additionally, Kaspa has announced plans to further develop its ecosystem through initiatives like Kasplex and the KEF Katalyst Program S1.
Kasplex is a comprehensive solution designed to enhance the Kaspa network’s efficiency and sustainability. It incorporates a data insertion protocol, an open-source indexer, and robust APIs, enabling seamless creation and management of KRC-20 tokens and NFTs. By leveraging Kaspa’s high block rate and decentralized Proof-of-Work (PoW) Layer-1, Kasplex fosters the development of a diverse ecosystem of decentralized applications.
The KEF Katalyst Program S1 is a series of initiatives aimed at accelerating the growth of the Kaspa ecosystem. Supported by $10 million in funding, Stage 1 includes grants, infrastructure development, and educational events. This program is designed to promote Kaspa, encourage developers to collaborate, and provide a platform for innovative projects.
Kaspa recently introduced these initiatives to boost its ecosystem and increase adoption. Let’s take a closer look at Kaspa’s project status and technology.Kaspa recently introduced these initiatives to boost its ecosystem and increase adoption. Let’s take a closer look at Kaspa’s project status and technology.
Overview
Kaspa is a Layer-1 blockchain distinguished by its blockDAG structure, leveraging the GHOSTDAG consensus protocol as an evolution of the PHANTOM mechanism. Compared to Bitcoin, the main difference in Kaspa lies in its structural pattern. While Bitcoin uses a singular chain structure, GHOSTDAG employs a Directed Acyclic Graph (DAG) where a block can point to multiple other blocks.
This design enhances transaction finality and accelerates block creation by allowing parallel processing. Unlike traditional PoW chains, Kaspa utilizes a KHeavyHash proof-of-work consensus algorithm, optimizing energy efficiency while accommodating increased hashing power to ensure blockchain security and decentralization. Through innovative pruning techniques, Kaspa minimizes storage requirements by retaining only essential transaction data, typically encompassing approximately three days of ledger history. However, critical blocks may still need to be pruned to support future transaction outputs under specified conditions. Currently operating at one block per second, Kaspa aims to scale to 10 and eventually 100 blocks per second. Notably, its smart contracts, originally in GoLang, underwent a transition to Rust in 2024, alongside mining nodes beginning the migration to Rust earlier that year, marking a pivotal advancement in its technological ecosystem.
Migration from GoLang to Rust
Rust’s reputation for high performance and safety aligns well with Kaspa’s goals of increasing transaction speed and network capacity. This migration involves rewriting Kaspa’s full-node and related libraries in Rust to leverage modern computing potential and benefit from Rust’s vibrant developer community.
Kaspa’s decision to transition from Golang to Rust is driven by:
- Performance Optimization: Rust is renowned for its superior performance, boasting advanced capabilities like parallelism that enable concurrent processing of multiple blocks across CPU threads. This feature is particularly vital for Kaspa’s blockchain network, which targets the handling of a remarkable volume of transactions and blocks per second.
- Modern Computing Potential: Through its adoption of Rust, Kaspa seeks to maximize the capabilities of modern computing hardware by optimizing for energy efficiency.
- Safety and Reliability: Rust prioritizes safety, mitigating common programming errors that could otherwise expose security vulnerabilities. In the context of a blockchain network, where security is paramount, Rust’s compile-time safety checks provide an added safeguard against potential threats.
- Community and Ecosystem: The Rust programming community is expanding swiftly. Kaspa’s transition to Rust enables it to integrate into this ecosystem, gaining access to a wealth of shared knowledge, tools, and libraries developed by Rust enthusiasts.
The migration to Rust holds significant implications for the Kaspa network:
- Enhanced Transaction Throughput: By improving transaction processing speed, Kaspa aims to substantially increase its transaction throughput, a critical factor for the broader adoption of its technology. This transition is foundational to achieving Kaspa’s future goal of handling up to 100 blocks per second.
- Energy Efficiency: Rust’s energy-efficient execution model aligns with Kaspa’s commitment to sustainability in blockchain technology. This shift supports a more environmentally friendly approach compared to traditional Proof of Work systems.
- Scalability: Rust’s efficiency and performance enhancements are anticipated to bolster Kaspa’s scalability. This capability will allow the network to handle a growing volume of transactions without sacrificing speed or security.
- Developer Attraction: The adoption of Rust may attract a larger pool of developers to the Kaspa project. Rust’s popularity among programmers who value performance and safety features could expand the talent base contributing to Kaspa’s ecosystem and innovation efforts.
As of the publication date, over 96.49% of the nodes have completed the migration from GoLang to Rust.
Hashrate
Hashrate is a measure of computational power used in blockchain networks. It refers to the number of hash calculations a mining device or network can perform per second. Hashrate is the speed at which a computer can solve cryptographic puzzles that secure transactions on the blockchain. A higher hashrate means more calculations per second, which improves the chances of successfully mining a block and earning rewards. Mining performance is measured in h/s (hashes per second).
1 Kh/s = 1,000 h/s
1 Mh/s = 1,000 Kh/s = 1,000,000 h/s
1 Gh/s = 1,000 Mh/s = 1,000,000 Kh/s = 1,000,000,000 h/s
1 Th/s = 1,000 Gh/s = 1,000,000 Mh/s = 1,000,000 000 Kh/s = 1,000,000,000,000 h/s
Kaspa network hashrate reflects the overall performance of all miners in the Kaspa network. Currently, the Kaspa network hashrate is 763.92 PH/s with a peak of 843.44 PH/s recorded on 13 August 2024.
Architecture
Bitcoin operates under the “longest chain” principle, which ensures the integrity of the blockchain by linking honest blocks together, thereby securing the network. However, this approach inherently limits network throughput and scalability due to its sequential processing nature.
Structural Model: Directed Acyclic Graph
Kaspa introduces the PHANTOM protocol, a permissionless ledger protocol based on a directed acyclic graph (DAG). Unlike Bitcoin’s single-chain structure, PHANTOM allows for referencing multiple previous blocks, facilitating a total ordering of all blocks and transactions while ensuring a consistent set of accepted transactions. Key to PHANTOM is parameter K, which regulates the protocol’s tolerance for simultaneously created blocks, thereby adapting to higher throughput scenarios. When K=0, the protocol resembles Bitcoin’s approach with no forks.
Linear Ordering
To address the double-spending problem, Kaspa adopts the GhostDAG protocol. GhostDAG evaluates each block based on its connectivity within the past block set, selecting the block with the highest overall score to form the main chain. This main chain forms the initial subset, with subsequent blocks voting sequentially based on this main chain order. The network as a whole votes according to connectivity trends from high to low.
Traditionally, blockchain systems face the issue of simultaneous block generation, leading to competing blocks and potential orphaned blocks that waste computational resources. GhostDAG resolves this by employing a DAG structure where blocks can reference multiple parent blocks, creating a BlockDAG instead of a linear chain. This supports parallel block creation, significantly improving system throughput without compromising security.
Moreover, the GHOSTDAG protocol incorporates additional sub-protocols such as block data pruning, SPV proofs, and proof-of-work enhancements, which collectively enhance performance. Block data pruning reduces blockchain size by discarding unnecessary data, while SPV proofs enable lightweight clients to verify transaction validity without downloading the entire blockchain. These innovations contribute to Kaspa’s scalability and efficiency in managing blockchain operations.
Tokenomics
Kaspa was fair-launched in November 2021 with no premine, presale or coin allocations. Kaspa is 100% decentralized, open-source, and community managed. The protocol has a maximum supply cap set at 28.7 billion tokens, with 24.9 billion currently in circulation. Presently, Kaspa commands a total market capitalization and a fully diluted valuation of $4.0 billion.
Emissions are designed to decrease annually, with a schedule that halves once per year via smooth monthly reductions. Initially mineable with CPUs, the network has progressively integrated GPU and ASIC mining capabilities. Kaspa follows a carefully structured emission schedule to manage token supply growth.
Mining Collaborations
On June 26, Marathon Digital announced that their mining operations for Kaspa have yielded 93 million KAS, valued at approximately $15 million since they commenced last September.
In May 2023, Marathon began evaluating Kaspa as a potential way to diversify its revenue while continuing to utilize its current infrastructure and expertise in digital asset compute. After successfully deploying its first Kaspa ASICs in September 2023, the company began scaling its operations. Marathon has purchased approximately 60 petahash of KS3, KS5, and KS5 Pro ASICs, each of which is estimated by ASIC Miner Value to generate profit in certain cases up to 95% margins given the current network difficulty rate and price of KAS. 30 petahash of Marathon’s Kaspa ASICs are currently operational in the Company’s self-owned and operated facilities in Texas, and the remainder are currently expected to be fully energized in Q3 2024.
“By mining Kaspa, we are able to create a stream of revenue that is diversified from Bitcoin, and that is directly tied to our core competencies in digital asset compute,” said Adam Swick, Marathon’s chief growth officer. “Because of our existing infrastructure, our unique relationships with hardware manufacturers, our strong balance sheet, and the expertise of our team, Marathon was uniquely positioned to mine Kaspa and to capitalize on the higher margins that exist for those who can deploy Kaspa ASICs today. We look forward to continuing to support innovation in proof-of-work ecosystems, as we expand our position as a leader in digital asset compute.”
Once fully deployed, Kaspa will represent 1% of Marathon’s 1,100 MW data center portfolio.
References:
Yonatan Sompolinsky, Shai Wyborski, Aviv Zohar. Kaspa Whitepaper. https://whitepaper.io/document/0/kaspa-whitepaper
Kaspa Tokenomics: https://kaspa.org/tokenomics/
Kaspanet: https://github.com/kaspanet/docs
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