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Invest in Kusama in 2022

Last updated 26th Sep 2022
Disclosure

Kusama is the pre-production environment for Polkadot. It serves as a test region for new features before being implemented on Polkadot. The Kusama (KSM) coin plays a vital role in operating the Kusama network.

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What is Kusama?

Kusama was founded in 2019 by Gavin Wood, founder of Polkadot and co-founder and former CTO of Ethereum.

Kusama hosts blockchains, handles the security, as well as the transactions, while also bridging blockchains to other networks such as Ethereum, for example.

Kusama is the Canary Network for Polkadot. A Canary Network enables a realistic testing environment for developers to identify vulnerabilities or weaknesses within the Polkadot codebase.

The project has become extremely popular because it is utilized as a test network for apps before they are launched on Polkadot.

Within Kusama, users can participate in the governance process by buying KSM tokens.

On August 16, 2019, KSM had its first recorded value at $5.16. At the time of writing, the token has a value of $455.99. This is an 8737.02% increase in value since inception to date.

Kusama had a market cap of over $3.8 billion, with a circulating supply of 8,470,098.06 KSM tokens at the time of writing.

Pros

  • Allows developers to test out their code before pushing it on Polkadot.

  • The low circulating supply may apply upward pressure on the price of KSM.

  • Kusama can scale and accommodate an unlimited number of projects without its network slowing down.

Cons

  • There’s a lot of competitors out there, such as Ethereum 2.0 and Tezos.

  • The KSM token is only available on a limited number of exchanges.

  • Being a canary network focused on research and development and a testbed to Polkadot, KSMs might be lower valued but still, have some value.

How Does Kusama Work?

The Kusama network works by allowing the creation of two types of blockchains.

  • The Relay Chain - the main Kusama blockchain. Within this network, the transactions are finalized and to achieve a high level of speed. It separates the addition of new transactions from the act of having to validate those transactions.

  • Parachains - custom blockchains that use the computing resources provided by the relay chain to confirm that the transactions are accurate.

To keep the network in agreement, the Kusama Relay Chain uses Nominated Proof-of-Stake (NPoS).

Anyone who stakes KSM by locking the cryptocurrency in a special contract can perform one or more roles required for the operation of the network.

  • Validators ensure that the data within parachain blocks is valid, participate in the consensus, and vote on proposed changes to the network.

  • Nominators secure the Relay Chain by selecting validators that are trustworthy.

Regarding the Kusama Governance, three types of users can impact the development of the software.

  • Referendum Chamber - anyone that buys KSM tokens can propose changes and approve or reject major changes proposed by other users.

  • The Council - council members are elected by KSM holders, after which they can determine which changes that are proposed can be made to the software.

  • Technical Committee - teams that build Kusama on an active basis and can make special proposals when an emergency arises.

Ways To Buy Kusama

Kusama (KSM) can be bought through many different methods, the primary ones being cryptocurrency exchanges, P2P marketplaces, and in-person trading.

  • Cryptocurrency Exchanges – Cryptocurrency exchanges will allow you to purchase KSM directly. You need to find an exchange that will provide you with fair fees, solid trading pairs for the KSM token, and high liquidity.

  • P2P Marketplaces – P2P (Peer-to-Peer) marketplaces connect you with a seller of the KSM token directly. There will always need to be someone selling the KSM token for this type of trading to be successful.

  • In-Person Trading – To engage in in-person trading, you will need to arrange a meeting with the seller of KSM directly at a physical location and make the transaction in whatever way you both agree with.

Here is everything you need to know about buying Kusama (KSM)

  1. Create an account for a cryptocurrency brokerage or exchange that you have decided on using. Make sure it supports Kusama (KSM) pairs.

  2. Fund your account. Some exchanges or brokerage will require KYC and AML documents, but this takes a few minutes. Once you complete the verification process, you can deposit FIAT currencies. Select your best deposit option and enter the amount you would like to spend.

  3. Type KSM in the search bar of the exchange or brokerage. Click on “Buy” to complete your transaction, and once it confirms, you will find your KSM coins on your account balance.

How To Invest in Kusama

You can invest in Kusama (KSM) by implementing a variety of different investment strategies, from day trading to scalping, swing trading, and others, you are not limited in terms of variety.

You do not need to buy the token directly to trade it. Through KSM trading, you can essentially speculate if the price of the token will go up or down without actually owning it yourself.

Furthermore, you can utilize short-term and long-term strategies efficiently and take advantage of margin and leverage trading.

Additionally, you can utilize entry orders, stop losses, profit-limit orders, and risk-management methods.

With that in mind, below, we have outlined the ways through which you can get started today.

  • Brokerages. Kusama (KSM) can be directly invested in through the utilization of a cryptocurrency brokerage. This option is specifically tailored towards beginners because brokerages are simple to use and are fully regulated. All you will have to do is look up Kusama (KSM) in the search bar and invest in it directly.

  • Exchanges. Cryptocurrency exchanges will typically be the go-to option for traders that feel a lot more comfortable investing on the open market. They offer a lot more variety in terms of trading capabilities, such as charts, indicators, notifications, and bots. When you want to invest in Kusama (KSM) on a larger scale, exchanges are the go-to option. Remember that the KSM token might not be offered on every exchange platform out there due to rivalry.

Is It Safe To Invest in Kusama Right Now?

Volatility affects the price of KSM, as with all cryptocurrencies and potential buyers should be aware of this fact and only invest what they are prepared to lose.

There is an upward trend in terms of price potential but this is subject to various factors. Kusama’s value to developers is undeniable but it is still worth keeping in mind that the network was created primarily as a testing ground.

When investing in Kusama, remember to consider the reputation, fees, and security of your chosen platform.

Amala Pillai

Amala Pillai

Amala is custom content and news editor based in London. She is a former financial journalist based in Singapore with 7 years of experience covering a range of business and financial topics. Now she focuses on crypto and macro-economics. She has also covered feature profiles, tech, business politics and ESG— she was the Environment Editor for the Solutions Newspaper, 2016 and worked in an editorial capacity at both News corp (Dow Jones) and JBN. She also has experience as a content creator, strategist and brand editor for various financial institutions and banks.