Kusama price prediction: Will it reach $600 again?
Kusama (KSM) is a scalable network of specialised blockchains built using Substrate. It’s referred to as Polkadot’s canary network because it serves as a near identical copy of the Polkadot blockchain.
As an experimental development environment, Kusama provides teams with the ability to test and fine-tune new features and early versions of projects in preparation for deployment on the Polkadot open-source blockchain platform. This is made possible because the network performs nearly the same functions as Polkadot.
More specifically, Kusama enables developers to build and deploy a parachain or try out Polkadot’s governance, staking, nomination and validation functionalities in a real environment before they are released on Polkadot.
The early, unaudited and unrefined release of Polkadot is not economically centralised and aims to cater to new, early-stage and high-risk functionality startups and projects.
The company, founded in 2019 by Gavin Wood, has stated that its goal is to spark innovation by placing the latest technology from Parity Technologies and the Web3 Foundation in the hands of developers even before those features make it to Polkadot.
Overall, Kusama’s open governance and sharded blockchains provide businesses, marketplaces and applications looking to move to Polkadot with a scalable infrastructure.
What is Kusama (KSM)?
Kusama is powered by KSM, its native token, which maintains the network. The main function of KSM is to enable users to validate, nominate validators, bond parachains, pay for cross-chain message passing and vote on governance referenda. It can also be used as a governance token for managing protocol updates.
The Kusama network relies on a Relay Chain that uses a nominated proof-of-stake (NPoS) model. Anyone who stakes KSM is eligible to perform any or all of the following roles:
a validator who is responsible for validating data in parachain blocks and participating in consensus and voting processes. Validators are elected based on a sequential Phragmén algorithm
a nominator who secures the Relay Chain by appointing his/her staked KSM tokens to validators in order to share in the rewards that are paid out
As it pertains to Kusama’s unique tricameral governance model, anyone who purchases KSM tokens can propose changes to the network and approve or reject changes proposed by others through a Referendum Chamber.
The chamber consists of stakeholders who are weighted according to both the amount of KSM held and the amount of time they are willing to hold these tokens. This legislative chamber is considered to have the broadest membership and is by far the most powerful chamber.
KSM holders can also elect members to an executive body known as the Council. A Technical Committee, composed of members voted in by the Council, also exists for the purpose of making urgent proposals in the event of an emergency. Overall, voting on proposals in the Referendum Chamber lasts 28 days and, if approved, it takes a further 30 days before any changes come into effect.
What’s more, validators can stake their KSM tokens in order to earn inflation rewards. Inflation is designed to be approximately 10% annually, with validator rewards being a function of the amount staked and the remainder going to the Treasury.
It’s worth noting that KSM is inflationary. There is no maximum supply. The network attempts to maintain an ideal staking rate of 50%, and KSM is inflated according to the system staking rate of the entire network.
The system staking rate would be the total amount of KSM staked over the total token supply, whereas the total amount staked amounts to the stake of all validators and nominators.
KSM price analysis: Technical view
The KSM coin was launched in December 2019. It reached an all-time high of $623.75 on 18 May 2021 when it climbed by 105% from its earlier price of $303.04 on 24 April 2021.
This surge could be attributed to KSM being listed on two major cryptocurrency exchanges. First, KSM was listed on the world’s largest crypto exchange, Binance on 2 September 2020.
On 17 September 2020, the token was listed on one of the world’s largest digital asset exchanges, Kraken. Then on 24 November 2020, Kraken added support for staking with a reward of 12% yearly.
The beginning of 2021 can be considered a breakthrough year for KSM. On 1 January it was worth $69.5 . It hit $273.07 just 52 days later. The uptick continued when the price rallied to $547.91 on 29 March 2021.
However, this rally was short-lived. KSM lost over 50% of its value on 23 May 2021, falling to $262.97.
Last year, Kusama ran a total of six parachain auctions from 1 September until 13 October, with each auction lasting seven days. Shortly before this, KSM had been trading at $296.04 on 24 August 2021, but the price rose to $402.99 on 2 September, once the auctions had commenced. A further surge saw the price reach $509.62 on 7 November 2021.
KSM is currently (6 January) trading at around $265.51, and ranks 59th in the list of cryptocurrencies by market capitalisation at $2.2bn, according to CoinMarketCap.
Technical analysis provided by CoinCodex shows that short-term sentiment on KSM is bearish, with three indicators displaying bullish signals compared to 23 bearish signals.
The daily simple and exponential moving averages are giving sell signals, according to data from TradingView, while the relative strength index (RSI) is at 39, as of 6 January. An RSI reading of 30 or below indicates an oversold or undervalued condition.
Low barriers to entry for deploying parachains
What is distinctive and beneficial about Kusama is that it brings multiple blockchains together in one sharded network, freeing developers from the silos created by legacy blockchain networks.
Those using Kusama in order to facilitate testing can build a user base in a flexible development environment and fine-tune new features and early visions for projects in preparation for full deployment on Polkadot.
The diverse Kusama ecosystem allows developers to test innovations and still have almost the same experience as building on Polkadot, as both platforms possess the same codebase and multi-chain infrastructure.
Another benefit is that businesses, marketplaces and applications looking to transition to Polkadot can launch their own custom blockchain projects with low barriers to entry, making Kusama ideal for early-stage startups that are looking to move fast and iterate.
Developers can also build their own app-specific blockchain and connect it to Kusama using Substrate, the modular blockchain framework that Kusama is built on.
A risk for Kusama is that it is a wholly experimental network created to test scalability and interoperability and launched only in 2019, making it a relatively new project operating in a nascent industry.
“Kusama is the testing sandbox for Polkadot, the ‘blockchain of blockchains’ founded by the genius brain behind Ethereum’s smart contracts, Gavin Wood,” said Col Jung, a cryptocurrency expert and engineer working in analytics and mathematics modelling.
Anndy Lian, chairman of BigONE Exchange and chief digital advisor for Mongolia’s national productivity agenda, said that Kusama can leverage Polkadot’s wide user base and global reach.
“Kusama’s most recent parachain slot auctions that ran throughout December 2021 prove my point,” Lian told Capital.com.
Kusama price prediction: Buy, sell or hold?
In terms of a KSM price prediction , algorithm-based forecasting service Wallet Investor gives a positive KSM/USD forecast. Based on historical data, Wallet Investor sees the price going up to $339.772 by February 2022, reaching $854.074 in January 2024 and hitting $1430.010 by January 2026.
Digital Coin Price supports the bullish KSM forecast, expecting the token to grow to $382.95 in February 2022, $628.94 in January 2025 and $1,004.72 in January 2028.
Note that predictions can be wrong. Forecasts shouldn’t be used as a substitute for your own research. Always conduct your own due diligence before investing. And never invest or trade money you cannot afford to lose.
FAQs
Will the Kusama price go up or down?
The algorithm-based company Wallet Investor predicts that the price could reach $1,430.01 by January 2026.
Note that predictions can be wrong. Forecasts shouldn’t be used as a substitute for your own research. Always conduct your own due diligence before investing, and never invest or trade money you cannot afford to lose.
Is the Kusama coin a good investment?
Whether KSM is a good investment for you depends on your personal circumstances and risk appetite. Cryptocurrencies are high-risk assets. You should do your own research and evaluate the level of risk you are prepared to accept before investing. Never invest money you cannot afford to lose.
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