What is Kaspa? Mining and KAS Tokenomics

What is Kaspa?

Kaspa is a decentralized, open-source layer 1 blockchain that uses a blockDAG architecture. This design allows it to process multiple blocks simultaneously, ensuring sub-second transaction confirmations. Kaspa’s architecture ensures efficient block propagation, even under high network load.

The network is built on the GhostDAG protocol, derived from PHANTOM’s theoretical framework, which improves Nakamoto Consensus to handle high block rates securely. Kaspa achieves this without compromising its core principles, as it launched without pre-mining or centralized control.

Kaspa employs proof-of-work mining to secure the network and validate transactions in a decentralized and transparent manner. Its energy-efficient kHeavyHash algorithm makes it one of the most environmentally conscious PoW networks, further distinguishing it from other projects.

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How Does Kaspa Work?

Kaspa uses a combination of innovative protocols and a decentralized structure to process and secure transactions at high speeds.

• BlockDAG Architecture: Unlike linear blockchains, Kaspa’s Directed Acyclic Graph structure allows multiple blocks to coexist and be processed simultaneously, reducing confirmation delays.
• GHOSTDAG Protocol: Based on PHANTOM, this consensus method brings parallel blocks into the main chain, preserving transaction order and maintaining network security.
• Proof-of-Work Mining: Kaspa relies on computational mining to validate transactions and secure the network with sub-second confirmation times.
• Transaction Finality: The system confirms transactions almost immediately, even under high network activity.
• Fair Launch: Kaspa started without pre-mining or centralized control, ensuring its decentralized nature.

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KAS Tokenomics

Kaspa's KAS token is one of the few fair launches in recent years, with no token allocations for teams or investors. Kaspa's monetary policy, described as inflationary in the short term and deflationary in the long term, reflects a carefully designed emission model that adapts over time.

• Supply: The maximum supply of KAS is fixed at 28.7 billion tokens, ensuring long-term scarcity, with approximately 25.44 billion tokens currently in in circulation (88.6% of the total supply).
• Token Utility: KAS is primarily used to pay transaction fees and secure the network, with future potential for integration into decentralized applications.
• Emission Schedule: Kaspa's mining rewards decrease monthly by a factor of (1/2)^(1/12), halving annually. From January 2025, the block reward becomes 36.71 KAS.
• Inflationary Phase: Currently, Kaspa remains inflationary, with new tokens regularly added to circulation through mining rewards. However, the fast emission schedule means the inflation rate is rapidly decreasing.
• Deflationary Transition: Once mining ends, the supply will stabilize, transitioning the currency into a purely deflationary model where value is driven entirely by market forces and demand.
• Transaction Fees: Fees remain minimal at 0.000023 KAS, with potential adjustments during network congestion.

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Mining on Kaspa

Mining KAS requires specialized ASIC hardware, which is optimized for the network’s energy-efficient kHeavyHash algorithm. To begin mining, users need to acquire ASIC miners, as these provide the best performance for Kaspa's algorithm.

Miners then select a mining pool to join, with popular options including F2Pool, ViaBTC, and Kaspa-Pool.org. After choosing a pool, miners configure their mining software to align with the pool's settings and input their Kaspa wallet address to receive rewards.

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Best Wallet for KRC-20 Tokens

The KRC-20 token standard is a set of rules for creating fungible tokens on the Kaspa blockchain. For managing these assets, several native wallets offer strong support:

• Kasware: A hierarchical deterministic wallet available as a Chrome extension, allowing users to manage multiple accounts under one public key. It is the most popular wallet for KRC-20.
• Ghost Wallet: An open-source Chrome extension wallet for Kaspa, enabling users to mint, swap, send, and receive KRC-20 tokens directly within the browser.
• Zelcore: A versatile multi-asset wallet supporting over 60 blockchain protocols and 450+ coins and tokens, including Kaspa, Bitcoin, Ethereum, BNB Chain, and Solana.

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Kaspa Statistics

Kaspa's blockchain offers comprehensive metrics, highlighting its active and decentralized nature. For this analysis, we utilize data from the official Kaspa blockchain explorer and the kas.fyi alternative, ensuring accurate and in-depth insights.

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Blockchain Usage

Kaspa’s blockchain illustrates consistent activity, reflecting its adoption and growth. Key statistics include:

• Average Transactions: Over the past 90 days, the network has processed approximately 4 million transactions daily on average.
• Active Wallets: The blockchain records an average of 65,000 active addresses daily, suggesting decent user engagement.
• Network Infrastructure: Kaspa maintains a hashrate of 1.49 EH/s with 151 active public nodes globally, ensuring security and decentralization.

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Top Projects on Kaspa

Kaspa’s KRC-20 ecosystem is currently limited in functionality due to the absence of smart contracts. As a result, most tokens serve as community-driven meme coins with no broader utility.

Despite this, these tokens have gained popularity for their creativity and active communities. Below are some key projects:

• NACHO: Valued at $21.0M. A meme token inspired by Kaspa researcher Shai Wyborski’s cat, appealing to lighthearted community engagement.
• KASPY: Market cap of $8.3M. Popular among users interested in acquiring tokens in high volumes due to its accessible nature.
• GHOAD: Market cap of $3.3M. Inspired by Kaspa's GHOSTDAG protocol, blending creative concepts with community involvement.
• KEIRO: Market cap of $2.8M. A niche addition that adds diversity to the ecosystem without extensive functionality.
• KASPER: Market cap of $2.7M. Branded as the “Ghost of Kaspa,” aligning with Kaspa's identity while fostering community spirit.

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Price Performance

Kaspa’s market performance reflects its increasing influence in the crypto space:

• Current Price: $0.1157 per KAS, with a market cap of $2.94 billion.
• Circulating Supply: 25.45 billion KAS, reinforcing its scarcity and long-term value.
• Market Trends: Kaspa’s price has shown volatility, moving within the $0.10 - $0.20 range over the past year, reflecting typical fluctuations in demand and trading activity.

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Founders

Kaspa was founded in 2021 by Dr. Yonatan Sompolinsky, Michael Sutton, and Shai Wyborski, all affiliated with the Hebrew University of Jerusalem in Israel. Notably, Sompolinsky co-authored the GHOST protocol, which influenced Ethereum's design through elements like uncle blocks.

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Bottom Line

Kaspa shows that proof-of-work still has room for innovation, delivering speed, scalability, and decentralization while others, like Ethereum, decided to pivot to proof-of-stake models early.

While smart contract functionality is missing for now, 2025 could bring pleasant surprises for developers. Even so, KAS’s underperformance on the market over the past year reminds us that cutting-edge tech doesn’t always translate to financial success.