The Kadena network is introducing novel layer-1 proof-of-work (PoW) blockchain scaling solutions catering to individual developers and enterprises alike. As the only scalable hybrid blockchain using a PoW based consensus algorithm, Kadena's blockchain ecosystem offers both public and private networks. In turn, Kadena's crypto project is quickly becoming a leader in the industry. As a result, the native Kadena token (KDA) has seen positive price action from the recent attraction and adoption of the platform. The KDA token holds several crucial responsibilities for the project and is vital to ensuring complete decentralization.
In this article, we are going to dive deep into the Kadena crypto ecosystem, and we will explore the fundamental structure of Kadena's blockchain network. Furthermore, we’ll look at the project’s novel hybrid blockchain technology. Also, we will discuss the various utilities of the KDA token and enterprise use cases of Kadena's crypto project.
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What is Kadena?
Stuart Popejoy and Will Martino are the founders of Kadena, launching the novel hybrid blockchain model in January 2020. Kadena uses the traditional proof-of-work (PoW) consensus mechanism with an upgrade to the hashing algorithm, providing a scalable, fast, and more secure blockchain solution than any other PoW chain. With a background in blockchain development with JPMorgan Chase - Popejoy and Martino present Kadena as a solution to the drawbacks and limitations of the two current largest cryptocurrencies and their blockchains, Bitcoin and Ethereum.
Kadena is the world’s first scalable proof-of-work (PoW) blockchain using a "sharding" approach. The Kadena network itself operates across multiple interweaving blockchains. This includes a public layer-1 network called "Chainweb" and a private layer-2 network called "Kuro". Furthermore, the third key element of Kadena is its open-source programming language, "Pact". We’ll discuss all of these services in further detail later in the article.
This hybrid blockchain technology, combined with the valuable experience of the project's team, makes Kadena an attractive choice for enterprise blockchain solutions. By its nature, the project offers a scalable, flexible, and fast, smart contract-compatible payments solution for businesses.
The project raised $15 million with funding from 16 investors in 2018 over four fundraising rounds. This includes Susquehanna International Group (SIG) and INBlockchain (INB). According to PrivCo, the valuation of Kadena was in the range of $10 million to $50 million in 2018. However, Kadena now sits with a market cap at nearly one billion dollars ($937 million) at the time of writing, according to CoinGecko.
Kadena - Hybrid Blockchain Technology
Kadena is a multi-chain network comprising braids of numerous “Bitcoin-like” chains. Initially, the Kadena network had ten chains during the launch. However, the scalable infrastructure means that Kadena can add further chains to infinitely grow due to its adoption and demand. The multi-chain architecture increases throughput and security with additional chains. In 2020, Kadena grew from ten to twenty chains throughout the year, doubling the project’s throughput. The team plans on expanding this further to 100 chains within the following twelve months. With 100 active chains, the team estimates Kadena will be capable of processing 1,000 to 10,000 transactions per second (TPS) per chain. Thus, the network could process one million TPS in total.
Kadena's scalable hybrid blockchain infrastructure operates using a "mechanism to asynchronously produce many blocks on different peer chains all at the same height”. Thus, the amount of hash power needed to produce each block drastically decreases. As such, this simultaneously increases the throughput of the network.
Moreover, while Kadena offers minimal network fees, the project also offers a crypto gas station for businesses. This allows businesses to cover the gas costs of customers, offering a zero-gas service for end-users. In turn, Kadena hopes that this will improve the end-user experience and increase adoption by reducing unfamiliarities and technical hurdles such as installing and navigating a crypto wallet. For developers, this framework is easy to set up with the Pact programming language, supporting gas stations “out of the box” thanks to a recent update.
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Chainweb (Public Network)
Chainweb is Kadena’s unique, public proof-of-work (PoW) blockchain, which uses a parallel-chain architecture to provide high throughput and scalability. Fully-scaled Chainweb networks can run thousands of chains at the same time while increasing throughput and maintaining security with each newly added chain. Also, Chainweb claims to be “the only sharded and scalable layer-1 PoW network in production today”.
Furthermore, Chainweb operates using mining operations with competition distribution across multiple chains. In turn, this increases the attack resistance of the chains, lowers the competition and hash rate for each chain, and addresses the resultant energy footprint of operations. Chainweb is far more energy-efficient than other single-blockchain proof-of-work (PoW) networks.
Kuro (Private Network)
The private network within the Kadena crypto project is called Kuro. Kuro is a layer-2 network that developers can use to build and deploy scalable, secure, and private decentralized applications (dApps). With community editions initially available through Microsoft Azure and Amazon Web Services (AWS) marketplace, Kuro is now a fully operational open-source project.
In 2020, the introduction of Kuro coincided with the update adding an additional ten braided chains within the network. As a result, Kadena is now an industry-leading project claiming to process 480,000 transactions per second (TPS) across all chains. As such, Kadena overtakes Solana as the fastest blockchain in the world, which can currently process up to 65,000 TPS.
Pact - Smart Contract Programming Language
Pact is a smart contract programming language that is human-readable by non-developers. Having undergone rigorous testing in production-ready applications, Pact enables anyone with “Microsoft Excel-level of programming competence” to create fully-functioning smart contracts and publish them directly on the blockchain.
Kadena's programming language facilitates contract upgradability, transactional logic, multi-signature capabilities authorizing the latest security protocols, and error messages. Furthermore, Pact presents an efficient and functional balance of data management, authorization, and workflow. Using Pact, developers can design secure, cross-chain decentralized applications (dApps) with throughput capable of mass adoption. In addition, a developer can choose and manage their own individual approach regarding inter-blockchain communications.
The native Kadena token (KDA) holds similar roles and functions to ETH on Ethereum. When using the Kadena platform and signing transactions requiring computational gas, users can cover these costs using the KDA token. Additionally, miners on the Kadena blockchain receive a percentage of the KDA token rewards with each block. Moreover, holders of the KDA token can stake their assets and suggest proposal updates to the platform. This is available through Kadena's decentralized autonomous organization (DAO).
The Kadena token (KDA) emission schedule occurs simultaneously through mining and the release of allocated tokens, and the total maximum supply of KDA tokens is one billion. There is a set amount of KDA tokens that were minted during the launch of the genesis blocks. Genesis blocks are the first blocks to be mined from which the rest of the chains in the Kadena blockchain network continued. However, the majority (70%) of the KDA token emissions are mining rewards for the network's nodes. Furthermore, the emissions curve is carefully crafted to avoid spiking, providing infrastructure for scaling. Moreover, the annual mining rewards emissions decay is set over 100 years. This creates trust, sustainability, and strong tokenomics for the KDA token. The tokens allocated to investors, contributors, and the Kadena team (10%) have a five-year emission schedule.
Kadena is hosting the first version of its decentralized autonomous organization (DAO) on its public blockchain. As a work in progress, the Kadena DAO is available through "dao.init" for users to discuss proposals, similar to an on-chain “Reddit”. Moreover, with two main responsibilities, the Kadena DAO allows the community to suggest and vote upon updates to the platform. Additionally, Kadena's DAO wants its members to “establish a decentralized process that can govern the addition of new features to the Kadena platform itself”.
As a flexible infrastructure, Kadena's DAO community has governance and influence over the DAO's structure. This includes the introduction of a tokenomic design for staking and lock-up requirements for participation. The next Kadena DAO update will be more community-led, allowing “greater authority over the entire Kadena platform”.
Before the mainnet launch, Kadena's DAO is requesting community feedback on its features, processes, and infrastructure design. As such, through the "dao.init" and "dao.forum", the Kadena DAO has two key parties; guardians and ambassadors. Guardians are participants who can contribute and approve "update proposals". Proposals can be anything from code and user interface (UI) adjustments to marketing, community, and awareness activities for the Kadena project. Moreover, to submit a proposal, the only requirement is a lock-up of 500,000 KDA tokens. With a one-day cooldown period after submission, proposals are live for three days for guardians’ approval and execution.
Ambassadors have the ability to collectively decide whether or not a proposal can be actioned. Moreover, ambassadors have the power to freeze the entire Kadena DAO for seven days with a majority vote. In turn, any submitted proposals would time out, rendering a proposal null and void. Discussions for Kadena's DAO updates are available through the "dao.init" forum that’s publicly and transparently moderated. Guardians act as moderators, while ambassadors are regular members.
Kadena Enterprise Use Cases
Kadena’s braided multi-chain architecture can be applied to various enterprise use cases. For example, the global disease treatment company called Rymedi is working in partnership with the U.S. Food and Drug Administration (FDA) to pilot using blockchain technology to build an application that collects real-world healthcare data and evidence about products to expand patent protection. Also, Rymedi is working with the FDA to trace CBD oil throughout the supply chain.
Furthermore, Kadena is working with alternative investment provider USCF to develop products on Kadena's private chain. According to founding member Will Martino, UCFC “believes that a hybrid blockchain could be the backbone of the next generation of exchange-traded funds (ETFs)”. As such, Kadena’s technologies appear to be positioned for large-scale enterprise adoption.
What is Kadena and the KDA Token? - Summary
The Kadena crypto ecosystem is expanding rapidly, with businesses large and small adopting the interoperable blockchain solutions the project offers. Using novel public and private hybrid blockchain technology, Kadena operates with multiple interweaving blockchains braided together. Moreover, as a smart contract-compatible network, Kadena offers developers an exciting cross-chain landscape to design and deploy applications using the world’s first secure, scalable layer-1 proof-of-work (PoW) blockchain, Chainweb. Additionally, Kadena offers Kuro, a private layer-2 network intertwining with Chainweb. The introduction of Kuro doubled Kadena’s throughput, capable of 480,000 transactions per second (TPS), taking the title as the fastest blockchain in the industry.
Furthermore, Kadena hosts its native decentralized exchange (DEX), Kaddex. As a multi-chain protocol operating on the only scalable proof-of-work (PoW) blockchain, Kadena claims Kaddex is the world’s first “truly decentralized DEX”.
As Kadena's hybrid blockchain network operates with multiple cooperating chains, each chain requires users to create a new account and account name. This means that if users want to own the same account name across the network, they must be the first to register said name across all chains separately. Also, it’s worth noting that it is not the account name itself that determines ownership. Rather, it is the keyset associated with an account. As such, Kadena stresses for users to pay attention to the chains they are transacting on.
The Kadena blockchain network is an innovative and progressive project introducing novel interpretations of traditional proof-of-work (PoW) blockchain infrastructures. For more information on the cutting-edge technologies and industry-leading developments, check out the wide range of courses available at Moralis Academy! Also, don’t forget to follow us on Twitter @MoralisAcademy! We’d love to hear your thoughts about the Kadena crypto project and the KDA token!