Project Name: Kaspa
Tag: $KAS
Type: Layer1

Introduction

Kaspa is a decentralized and scalable Layer1 network that uses BlockDAG architecture to address scalability issues associated with traditional blockchain operations. The project introduces the GhostDAG/PHANTOM mechanism to achieve scalability within the blockchain trilemma (security, scalability, and decentralization) while utilizing the KHeavyHash proof-of-work consensus algorithm to ensure blockchain’s security and decentralization.

Technical Principles

Bitcoin uses the “longest chain” principle to ensure honest blocks link together, safeguarding the network’s security. However, this design limits network throughput and scalability.

Structural Model: Directed Acyclic Graph

Kaspa introduces the PHANTOM protocol, a proof-of-work, permissionless ledger protocol. PHANTOM can reference multiple previous blocks, providing a total ordering of all blocks and transactions and outputting a consistent set of accepted transactions. PHANTOM includes a parameter K, which controls the protocol’s tolerance for simultaneously created blocks, allowing it to adapt to higher throughput. When K=0, it means no forks, resembling Bitcoin’s single-chain, longest-chain structure.

Linear Ordering

To solve the double-spending problem, Kaspa adopts the GhostDAG protocol. GhostDAG scores each block based on its connectivity (the number of elements in the past blocks set) and selects the block with the highest total score to form the main chain. The main chain forms the initial subset, and the remaining blocks vote sequentially according to the main chain order. The entire network votes according to the connectivity trend from high to low.
In a blockchain, it is common for two blocks to be generated simultaneously, requiring the system to choose which block to use, leading to “orphaned blocks,” wasting the resources used to generate them. The traditional solution is to select the “longest chain” to achieve final consistency, but this slows down the overall TPS of the blockchain. GhostDAG solves this problem using a directed acyclic graph (DAG). A block can point to multiple parent blocks instead of just one, creating a BlockDAG rather than a simple chain. This supports parallel blocks, improving system throughput without compromising security.
Furthermore, the GHOSTDAG protocol includes sub-protocols such as block data pruning, SPV proofs, and proof-of-work, providing better performance. Block data pruning can discard unnecessary data in blocks, minimizing blockchain size. SPV proofs enable lightweight clients to verify transaction validity without downloading the entire blockchain, further enhancing blockchain scalability.

Mining Decentralization

For individual miners, mining Bitcoin solely with their own computing power is challenging. Joining large mining pools for corresponding returns is a better choice. Due to economies of scale, consensus power is concentrated in a few large mining pools. Currently, the top three Bitcoin mining pools account for 66% of computing power. Kaspa’s high block generation speed lowers the difficulty for miners, facilitating mining decentralization.

Token Utilities

Mining Rewards: Similar to Bitcoin, miners receive KAS token rewards for each block they generate. This system incentivizes users to verify transactions and maintain the integrity of the network.

Key Metrics

Tokenomics

KAS was fairly launched in November 2021, with no pre-mining, zero pre-sale, and no token allocation. Kaspa is 100% decentralized, open-source, and community-managed. Kaspa’s maximum supply is 28.7 billion tokens, with an issuance plan that halves once per year, with monthly smooth halvings.