Not a Mainnet, Not a Testnet. Just Kusama.
Figment will offer a validator service for Kusama that will be open for delegation. If you own DOT, you own KSM–firstname.lastname@example.org to learn more.
The Kusama Network
Dubbed “Polkadot’s wild cousin,” Kusama is intended to be an early, unaudited, and unrefined release of Polkadot. An R&D network.
However, Kusama will be independent from Polkadot. KSM token-holders will reportedly own the network, and there will be no central kill switch. The vision is for its stakeholders to maintain Kusama in service of new features and projects being prepared for Polkadot.
Kusama should enable developers to deploy a parachain or test other Polkadot features, as well as mechanisms of governance, staking, nomination, and validating — with real economic conditions. Ultimately, Kusama should be a highly experimental version of Polkadot, running an early version of the code that will become Polkadot. A testbed for projects and progressive concepts.
Culturally, canary has become a warning flag symbol. Canaries were known to easily die from poisonous gases, so miners used them while working in tunnels as an early warning mechanism. A warrant canary is a method by which a communications service provider can indirectly inform its users of a secret government subpoena, despite legal communication prohibitions. Kusama is intended to be Polkadot’s canary network, “warning of issues for the developers downchain.”
If you own DOTs, you own KSM
The genesis distribution of KSM will mirror that for DOT: if you purchased DOTs in the sale, then you own an equal share of the Kusama network.
Will KSM be worth anything?
What the DOT is to Polkadot, KSM is to Kusama: the token that powers the network. Scroll a bit lower to read about what you can do with KSM. As for KSM’s value, that’s entirely speculative. KSM is like a sub-DOT, and it may have value for the same reason that DOTs may have value — because someone else might pay you for them. It’s a limited-supply asset, and if there are people that need more KSM than what the Polkadot team and/or foundation provide (via grants & faucet), a market for KSM could emerge. And in crypto, speculators be speculators ‾\_(ツ)_/‾
Kusama is supposed to be a messy, breaking, test environment — real applications aren’t supposed to be built on it, so it may not accrue much value. But it may. Like any other token, KSM’s potential value will depend on speculation and its usefulness. And though Kusama isn’t a mainnet, it’s also not a testnet.
Testnet tokens are valued at $0.00. Unlike testnets, the expectation with Kusama is that the network will live on. Even if it crashes and has to be rebooted, its state should be preserved; if you hold 10 KSM, you can expect to have 10 KSM in the future. So the environment to accrue value is there.
What can you do with KSM?
With KSM, you can validate, nominate validators, bond parachains, pay for interoperability message passing, and participate in governance on the Kusama network. The Polkadot team provided this user guide.
Participating on Kusama with your KSM could earn you some DOTs. One percent of DOT tokens at Polkadot genesis are reserved as a grant for Kusama’s stakeholders and community, though the mechanics have not yet been published. Staking your KSM will entitle you to rewards in KSM.
You Can Stake Your KSM
If you’re not planning to run a validator, you can use a validator service, such as what Figment provides. In Kusama, you can be a nominator, which is the process for delegating your stake.
Delegating Stake as a Nominator
The nominator 1) publishes a list of validator candidates that they trust and 2) submits the number of staked KSM to support them with (ie. delegate). The candidates elected as validators will share the staking risks and rewards with their nominators. If you‘d like to nominate us, email@example.com.
Annual Staking Returns
We don’t yet know the returns for staking KSM. If 50% of KSM is staked, then each validator will reportedly receive approximately 20% annual KSM returns, provided they are not punished for breaking protocol rules.
All of this may change (and will, if all goes well!)
One of the most exciting things about Kusama, for me, is that it will be a testbed for on-chain governance. We’ll get to try new features and protocol rules with real economic conditions. Kusama should be at the forefront of innovation — a beacon for the Polkadot network, and we’re looking forward to leading those initiatives.
Though Kusama has many of the elements of a testnet, and many elements of a mainnet, our position is that it is neither. Kusama just is. Well, soon. We can expect Kusama in September 2019.
Hopefully you found this useful. Feedback is always welcome! I’m on Twitter.