Welcome back to our staking course. Now that we’ve dissected the finer details, let’s take a look at some specific tokens that can be staked and you can explore.  We’ll provide all the background information so don’t worry if you don’t know that much about the asset.

What is Kusama Network

Kusama is a scalable multi-chain platform that serves as an experimental sandbox for developers looking to innovate or prepare for deployment on Polkadot. It was founded in 2019 by Gavin Wood, founder of Polkadot and co-founder and former CTO of Ethereum. As part of its functionality, Kusama staking allows network participants to support the platform’s security and operations.

Kusama is built by the same team as Polkadot, using almost the same code and tools, but with a different network structure and some additional features. It has faster governance parameters (7 days for a referendum compared to 28 days on Polkadot), making it a perfect place for projects to build and deploy a parachain or try out Polkadot’s governance, staking, nomination, and validation functionality in a real-world environment.

Kusama describes itself as a canary network. Canary networks are early, highly experimental, and unaudited versions of their cousin networks that come with real-world economic conditions, but without the same level of stability.

Apart from the rapid governance, the Kusama’s key features include: 

  • Uninterrupted on-chain upgrades;
  • Low entry barriers for launching custom blockchain projects;
  • Community ownership.

Consensus Mechanism Behind Kusama Staking

Kusama uses a hybrid consensus mechanism known as Nominated Proof-of-Stake (NPoS). This mechanism is a variant of the well-known Proof-of-Stake (PoS) model.

In NPoS, KSM holders who own a significant amount of tokens can become validators. These validators are responsible for creating new blocks and confirming transactions. However, due to the large number of KSM holders, not everyone can become a validator. 

For that reason, Kusama coin holders can nominate their tokens to be validators. This nomination process helps secure the network and also allows KSM holders to earn staking rewards. The NPoS mechanism ensures that the network remains decentralized and secure while allowing for scalability.

What is Kusama (KSM) Coin 

Kusama’s native token, KSM, serves multiple purposes within the network:

  • KSM is used for bonding. Bonding is a process where KSM tokens are locked to add a new parachain to the network. This ensures that the parachain has a stake in the network and incentivizes good behavior.
  • Kusama coin plays a key role in governance. KSM holders can vote on various proposals, such as protocol upgrades and changes to network parameters, giving them a direct say in the evolution of the network.

This multifaceted utility makes KSM an integral part of the Kusama ecosystem which is reflected in the token’s circulating supply and market capitalization:

How to Stake Kusama (KSM)

Now you can unlock the power of your Kusama tokens with our staking feature, CryptologyGrow. Enter the world of decentralized finance and get rewards for contributing to the security and stability of the network.

CryptologyGrow is Cryptology’s protocol staking platform that offers both fixed and flexible options when it comes to Kusama staking. The main difference between the two is the unbonding period of the staked assets, which refers to the amount of time a user has to wait before receiving their unstaked assets.

Neither option has a lock-up period as funds can be unstaked at any time which automatically stops the generation of associated rewards. Fixed staking also offers a higher APR and flexible staking offers the option to unstake without a bonding period.

CryptologyGrow offers competitive APR returns on Kusama staking with current rates ranging from 13% to 18% for fixed staking and from 5% to 9% for flexible staking. This includes the fee charged by Cryptology. The percentage of return is calculated and updated weekly, allowing users to access market-driven rates. The longer you stake KSM tokens, the higher APR will be applied to your assets.

To start staking Kusama with CryptologyGrow, you will need to:

  1. Go to the Grow Tab: Log into your Cryptology account and navigate to the "Grow" section.
  2. Select KSM for Staking: Choose KSM from the list of cryptocurrencies available for staking, decide between the fixed or flexible staking options, and specify the amount you wish to stake.
  3. Activate Rewards: Opt-in for "Automatic reward staking" to start accumulating your staking rewards daily. 

When you are ready to unstake your assets and receive your rewards, all you have to do is wait out the unbonding period, which usually takes seven days on the Kusama network if you decide on fixed staking. After that, all of the rewards your assets generated while staked will be deposited into your Cryptology account, as simple as that.

Like with any other product in the cryptocurrency market, certain risks are involved. The fact that CryptologyGrow only offers protocol staking mitigates these risks.

Here are the main ones to keep in mind: 

  1. Slashing: Validators can be penalized for malicious behavior or prolonged downtime. This can result in a loss of a portion of the staked tokens;
  1. Market Risk: The value of the staked tokens can decrease due to market fluctuations, affecting the value of acquired rewards.

To learn more about staking and other cryptocurrency-related concepts, be sure to check out the rest of the Cryptology Blog, especially the Academy section, which features educational articles for all levels of understanding.

! Disclaimer

The information provided in this article is for educational and informational purposes only and should not be construed as financial, tax, or legal advice or recommendation. Dealing with virtual currencies involves significant risks, including the potential loss of your investment. We strongly recommend you obtain independent professional advice before making any financial decisions. The products and services offered by Cryptology may not be suitable for all users and may not be available in certain countries or jurisdictions. The promotional materials do not guarantee any specific outcomes or profits from virtual trading. Past performance is not indicative of future results. It is important to read and understand the risks, which are explained in our Risk Disclosure Statement

Tom F.

Tom is one of the content managers here at Cryptology. While still fresh in his career he has been able to firmly place himself within the world of crypto and content creation, producing work for a number of publications including esports.net and The Times of Malta newspaper.