KSM – Kusama Network's Native Token

The Kusama network is designed for scalability and primarily serves as a platform for experimenting with new features and technologies from Parity Technologies and the Web3 Foundation before integrating them into Polkadot. However, its purpose extends beyond being just a testing ground for its better-known sibling. Kusama is a comprehensive multichain architecture that allows for the launch of parachains, which are independent blockchains created with Kusama and connected to the main ledger.

Ownership of Kusama lies with those who hold KSM tokens, meaning the project's governance is in the hands of its token holders.

In addition to governance, KSM tokens are used for staking within the blockchain, facilitating the Nominated Proof-of-Stake (NPoS) consensus mechanism. This algorithm involves nominators, or KSM stakers, who choose validators to maintain the network. When a nominator-supported node is granted the authority to verify transactions, the staker earns a portion of the reward.

KSM holders can use the token to cover transaction fees, take part in parachain auctions, and gain access to all of Kusama's offerings.

KSM has a market capitalization of $297.5 million, as reported by CoinGecko. There are currently 8.9 million tokens in circulation, with a total maximum supply of 10 million coins.

The allocation of newly created tokens depends on the quantity of KSM staked. If half of the circulating tokens are staked, validators receive all the new KSM tokens. However, if the staked amount significantly surpasses or falls below that threshold, a portion of the new tokens is directed to the Kusama Treasury.

DOT token holders at the time of Kusama's first block received an equal amount of KSM through an airdrop.

Launched in 2019, the Kusama multichain network was founded by Gavin Wood, who also established Polkadot and Parity Technologies. Polkadot aims to connect various blockchains within a unified ecosystem, while Parity Technologies creates software to facilitate this objective. Additionally, Gavin co-founded the grant-providing firm Web3 Foundation and previously served as Ethereum's CTO.

Kusama connects individual blockchains (parachains), developed using its platform, into one network. High scalability, instant transactions, and low fees are made possible through sharding — a decentralized ledger segmentation process. Kusama can connect to other blockchains like Polkadot, Bitcoin, and Ethereum via cross-chain bridges.

Developers employ the Substrate framework to build their projects, allowing them to customize not only smart contracts but also maintain complete control over their blockchain, optimizing it for specific needs. This feature distinguishes Kusama from numerous other networks that provide systems for application development.

With its low operational costs, Kusama is an appealing platform for startups with limited funding seeking a quick, cost-effective, and high-quality product launch.

Blockchain projects developed on Kusama can be transferred to Polkadot if desired.