Our weekly crypto derivatives analytics report delves into macro events, the current state of crypto and trading signals from spot trading volume, and futures, options and perpetual contracts.

BTC has finally surpassed the $100K mark, leading to increased bullish positioning in derivatives markets. This reflects strong sentiment and a desire for upside exposure in perpetual swaps and futures. Short-term implied volatility has risen as traders seek options to capitalize on the rally.

Please check out the report’s highlights.

BTC's successful breach of the $100K barrier has led to a noticeable return of perpetual swap markets to all-time high open interest levels, although the response has been somewhat muted. Earlier in the week, perpetual swap markets shifted their focus to ETH after BTC's repeated failures to break through $100K. While funding rates for both derivatives remained high and positive, open interest in ETH contracts increased at the expense of BTC positions prior to the breakthrough. Additionally, ETH trade volumes have constituted a larger-than-usual market share.

BTC Calls See No Significant Influx Post-$100K

The sudden rise in spot prices has triggered a sharp increase in demand for short-tenor options, as traders seek exposure to the upward movement. BTC's term structure inversion has driven short-tenor implied volatility levels above realized volatility. Although implied volatility for BTC is lower than that of ETH, open interest data shows that the influx of call option open interest in BTC markets wasn’t as significant as for ETH. Nevertheless, BTC's volatility skew remains strongly bullish.

ETH's options market showed the most bullish positioning ahead of the overnight spot move, while the perpetual swap markets for both major cryptocurrencies reflected strong positive sentiment. Open interest is heavily weighted toward OTM calls, signaling a robust preference for upside exposure as realized volatility starts to catch up to implied volatility. This demand for upside exposure is evident for both tokens, particularly with ETH's remarkable increase in call option open interest over the past 24 hours.

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Bybit X Block Scholes Crypto Derivatives Analytics Report (Dec 5, 2024): After BTC Turns $100K, Investors Are Still More Bullish on ETH

The cryptocurrency market is experiencing unprecedented growth, particularly in major assets like XRP, Cardano (ADA) and Stellar (XLM).

The cryptocurrency market is experiencing unprecedented growth, particularly in major assets like XRP, Cardano (ADA) and Stellar (XLM), whose tokens have seen substantial price increases (XRP up 444%, ADA 280% and XLM 512%). This surge is being driven largely by aggressive accumulation from whale investors, as well as cautious but optimistic sentiment in the crypto community. 

Meanwhile, interest in meme coins is declining as investors shift focus to more sustainable projects. The integration of AI in blockchain ecosystems and the emergence of hyperliquid token generation events (TGEs) are also reshaping market dynamics, indicating a transformative phase for cryptocurrencies.

Significant Growth in Major Cryptocurrencies

The report highlights impressive price increases for several major cryptocurrencies:

Despite these gains, general sentiment in the crypto community remains cautiously optimistic.

 activity is a key factor in current crypto market dynamics:

Since mid-October, there’s been considerable accumulation of Bitcoin by whale wallets, which have added a total of 91,856 BTC. This accumulation has played a substantial role in driving up BTC’s price.

In contrast, there’s been a decline in stablecoin holdings among these wallets, suggesting a strategic shift toward investing in cryptocurrencies, rather than choosing to hold stable assets.

The following several emerging trends are reshaping the cryptocurrency landscape.

Overall, our report underscores a transformative period in the cryptocurrency market, characterized by significant asset growth, strategic whale behavior and the integration of advanced technologies.

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Whales Accumulate Bitcoin as It Reached $100K; Emergence of AI Agent

Our monthly option volatility report delves into insights from options volatility to inspire your next crypto move.

Option volatility outlines a compelling narrative for Bitcoin as it approaches the $100K milestone. Leading up to the U.S. election on Nov 5, 2024, Bitcoin's implied volatility experienced a dramatic surge, with short-term implied volatility rising approximately 25 percentage points above post-election expirations. This spike indicated strong bullish positioning in the derivatives market as traders sought to capitalize on anticipated price movements driven by electoral outcomes.

In the immediate aftermath of the election, there was a sharp decline in short-term volatility, aligning with a rally in spot prices that, in turn, led to higher realized volatility. However, the decline in implied volatility didn’t reflect a long-term bearish sentiment — instead, it suggested a temporary easing of uncertainty regarding the election results. The term structure of implied volatility demonstrates a complex relationship: while short-term volatility dipped, longer-dated options remained stable above 50%.

The call/put skew indicates strong demand for bullish call options relative to bearish puts since the election, reflecting heightened upside exposure during BTC and ETH rallies. However, when BTC retraced to $91.3K, the skew shifted 6% toward puts, signaling bearish sentiment. This was inconsistent with futures markets, in which prices remained above spot levels, indicating ongoing bullishness. The skew toward OTM puts arose from increased demand for protective hedges, rather than from a lack of call interest. Ultimately, this suggests traders believe any sell-off would be temporary, supporting the idea that volatility is necessary in order for BTC to reach the $100K mark.

In contrast to Bitcoin, Ethereum (ETH) has emerged as a more consistently bullish asset in recent weeks. While both BTC and ETH exhibited similar volatility patterns immediately following the election, Ether has shown notable resilience and increased momentum, particularly in the wake of Gary Gensler's resignation. This political shift has positively influenced ETH’s market dynamics, resulting in a stronger demand for ETH options.

Ether outperformed Bitcoin during critical market events, including both the election and ETF announcements in 2024. Following Gensler's resignation, ETH gained significant traction, with traders increasingly focusing on Ethereum as a more attractive investment. This shift is evident in the significant drops in the ratio of BTC-to-ETH spot price, indicating that traders are reallocating their preferences toward ETH.

The divergence in implied volatility between BTC and ETH options further underscores this trend, as the ratio of implied volatility for ETH options has surpassed that of BTC, reflecting a stronger demand for ETH optionality. Historically, ETH has exhibited higher volatility compared to Bitcoin. This recent uptick in ETH's implied volatility reestablishes the typical pattern of ETH commanding a premium in the options market.

Moreover, the skew in options pricing has shifted in favor of calls for both BTC and ETH, but ETH's skew has remained more robust. This suggests a stronger bullish sentiment for ETH, as traders are positioning more aggressively for its price appreciation compared to that of Bitcoin. As the market continues to evolve, Ethereum's increasing dominance and the bullish signals from its options market position it as a leading contender in the cryptocurrency landscape, making it likely to outperform Bitcoin in the near future.

Bybit X Block Scholes Option Volatility Report: November Option Volatility Report: Volatility on the Road to $100K

Thruster (THRUST) is a cutting-edge DEX on the Blast Layer 2 blockchain, offering both standard and concentrated liquidity AMM pools. 

 chains has plenty of solutions offering minuscule fees, excellent scalability and nearly instant transactions. Seemingly countless sidechains, rollups and other types of Layer 2 networks servicing the Ethereum blockchain have been launched in recent years. However, many, if not most, of these chains struggle to offer anything beyond low fees and fast transaction processing capacity. While these benefits are nothing short of remarkable — especially considering Ethereum's never-ending network congestion issues — the innovation in this area needs to move beyond another platform offering the same cost and speed advantages.

 (BLAST) Layer 2 blockchain in early 2024 was a refreshing change — finally, an Ethereum Layer 2 solution that provides something more than just cost and speed efficiencies. Blast is known as a unique Layer 2 chain that offers native yields for ETH and 

, a feature that has attracted significant capital and 

 (DeFi) actors to the platform. Leveraging Blast's unique capabilities and popularity in DeFi, the Thruster Finance 

 (DEX) was launched on Blast’s blockchain in March 2024.

Thruster offers both the tried-and-tested 

 (AMM) model and a more advanced AMM model derived from the 

 (UNI) v3–inspired concentrated liquidity provision. Despite offering sophisticated options for token swaps and liquidity provision, Thruster aims to be as beginner-friendly as possible for traders, 

 (LPs) and developers. It has also tightly integrated Blast's own loyalty programs — Blast Gold and Blast Points.

 (THRUST) is a DEX on the Blast Layer 2 chain that provides standard AMM and concentrated liquidity AMM services to power its token swap and liquidity provision operations

.Thruster was launched in March 2024, soon after the introduction of Blast's mainnet, and builds upon the Layer 2 blockchain's popularity in the DeFi community, its capital efficiency and its cost and speed advantages.

Debuting in February 2024, Blast became a major Layer 2 market disruptor by introducing native yield benefits for holders of Ether and stablecoins. Simply by bridging your ETH or stablecoin funds to Blast, you can earn competitive yields from these assets as an added benefit to the cost and speed efficiencies that Blast boasts as an 

 solution. The native yield functionality quickly attracted DeFi users to the platform, a development that Thruster Finance has successfully capitalized on since the early days of its operation.

Thruster Finance consists of three key parts: the token swap section, the Uniswap v2–inspired constant factor AMM and the concentrated liquidity AMM, which adopts the basic characteristics of Uniswap v3.

Thruster quickly became the largest DEX on Blast by offering user-friendly and highly flexible token swap and liquidity provision options for its AMM and concentrated liquidity AMM components. At the height of its dominance on the chain, in June 2024, Thruster boasted a 

 (TVL) of close to $600 million. Although the protocol is currently off these highs, it still ranks as the largest DEX on the Blast blockchain, with a current TVL of 

The Thruster Finance project’s seed-stage startup is based in California. It was founded in 2023 by a pseudonymous team that has reportedly contributed to several top-50 protocols. In April 2024, Thruster attracted media attention when it 

 from several well-known institutional and individual crypto investors, including Pantera Capital and OKX Ventures.

Thruster supports token swaps for ETH, Blast's native cryptocurrency; BLAST, the blockchain's own stablecoin; USDB; and a range of tokens within the Blast ecosystem. Like other AMM-based exchanges, users trade against liquidity pools funded by LPs earning fees from transactions in each respective pool.

The platform features an analytics section that provides up-to-date, transparent information on the current swap rates, fees involved, 

There's also a portfolio section that helps traders track their investments and operations across pools and provides information on users' balances, earnings, staking and liquidity pool commitments.

For LPs, the platform offers two varieties of swap pools: the standard constant factor AMM and the concentrated liquidity AMM. We'll discuss these two kinds of pools in the section below.

Thruster also offers income opportunities via staking. Users who stake the platform's native crypto, THRUST, are issued veTHRUST tokens, which entitle them to earn revenues from the protocol's operations and other protocol benefits.

Although Thruster Finance offers fairly sophisticated products, it aims to appeal to all kinds of DeFi users, from rank beginners to seasoned pros. To meet this goal, the platform offers two user interface modes: lite and pro.

The lite mode is suitable for newbies and less experienced users. It features user-friendly token charts, critical token and pool information and social integrations. Meanwhile, pro mode is designed for experienced DeFi users and provides additional tools for order management, leverage use and asset discovery.

One variety of swap pools on Thruster is based on the constant factor AMM model. This is a standard AMM system, first introduced by Uniswap v1 and improved upon in Uniswap v2. In a constant factor AMM, a swap pool is based on a simple formula, 

 represent the quantities of two tokens in the pool and 

 is a constant that remains the same regardless of

. LPs provide liquidity at any price point for the swap pair, irrespective of how the swap rate moves.

The constant factor AMM model provides numerous advantages, including simplicity and relatively high predictability of yields for LPs.

Thruster, however, has made some modifications to the original constant factor AMM developed by Uniswap. First of all, the platform has implemented different fee tiers for swap pools. With Uniswap v2, all swaps are charged one fixed fee — 0.3% per transaction. However, using the same rate, without taking into account liquidity and activity levels for a particular pool, isn't the most flexible solution. This structure limits the flexibility of incentives for LPs — the primary recipients of revenues from swap fees. This is why Thruster has implemented a tiered fee system, as the differential fee model is designed to encourage more active and targeted liquidity provision and token trade.

Another unique feature of Thruster's constant factor AMM is the direct integration of Blast's reward systems, Blast Points and Blast Gold. In addition to transaction fee revenues, LPs may qualify for points under these loyalty programs.

Thruster also offers a more advanced variety of crypto trading and liquidity provision based on the concentrated liquidity AMM model. This is the AMM variation first introduced in Uniswap v3. 

In a concentrated liquidity AMM, LPs can provide liquidity within specific price ranges within a pool. The advantages of concentrated liquidity over the standard constant factor model are numerous, such as greater capital efficiency, potentially higher yields and reduced 

 rates. This type of AMM provides greater flexibility to LPs in terms of their capital allocation.

LPs contributing funds to Thruster's concentrated liquidity AMM pools are also rewarded with Blast Points and Blast Gold in addition to revenues from swap fees.

 is a blockchain explorer tool for the Blast ecosystem. In terms of functionality and design, it’s quite similar to Ethereum's 

. Blastscan lets you view detailed statistics on tokens and 

 addresses hosted on Blast’s Layer 2 platform. While Blastscan covers the entire blockchain's ecosystem and isn't specifically a part of Thruster Finance, it can be used by LPs to withdraw liquidity from Thruster's swap pools.

LPs can add liquidity only via the Thruster user interface, but they can use either the interface or Blastscan when removing previously added liquidity. The latter method isn't as user-friendly as the former option, but it might suit more technically minded users accustomed to the active use of Blastscan.

One distinct feature of Thruster is the abundance of additional incentives for users on top of the standard income from transaction fees. Rewards offered on Thruster include Blast Gold, Blast Points and Thruster Credits. Notably, these rewards aren't restricted to LPs, as other platform participants, such as token traders and referrers, can also expect to receive some of these reward types.

Blast Points are rewards that qualify you for BLAST token airdrops. The Blast project distributes these points to eligible individual wallets and smart contract addresses that hold balances of either of three assets — ETH, 

 stablecoin. Thruster Finance has integrated the distribution of these points to specific liquidity pools. The points are allocated to eligible LPs contributing to these pools.

Blast Gold represents rewards paid out by the Blast Layer 2 project to 

 (DApps) that actively contribute to the development of the blockchain's ecosystem. Essentially, Blast Gold is a bonus reward (on top of Blast Points) that Blast distributes to select DApps on its network. Thruster Finance is one of the recipients of Blast Gold. A recipient DApp project can internalize its Blast Gold rewards, or share them with their own user community.

Thruster has decided to share its Blast Gold rewards with its two main user community groups: LPs and token swappers. For the latter group, swaps involving ETH or USDB are eligible for Blast Gold rewards.

On top of the rewards provided by Blast, Thruster has designed its own loyalty program, Thruster Credits. These credits are awarded to LPs, token swappers, active participants in social media campaigns run by Thruster and those referring new users to the platform. Thruster Credits qualify you for the ongoing THRUST token airdrop, designed to distribute 7% of the token's supply to various groups of eligible users.

THRUST is Thruster Finance’s native cryptocurrency. Launched on Oct 9, 2024, it's an 

 asset issued on the Blast chain. When you stake THRUST on Thruster Finance, you’re issued Vote Escrowed Thrust (veTHRUST), an asset that qualifies you for a range of benefits, including a share of revenues from protocol fees, additional bonuses for liquidity provision, rewards from participation in on-chain voting and the 

 on key features and the future direction of the protocol.

THRUST is a supply-capped asset, with a total and maximum supply of 500 million. As noted earlier, 7% (or 35 million) of the token's supply is slated for distribution via an airdrop to several eligible user groups. These include eligible LPs, token traders and recipients of Thruster's reward program points, including Thruster Credits. The airdrop started on the day of THRUST's token generation event (TGE) in early October 2024, and is scheduled to last 90 days, until Jan 9, 2025.

The THRUST token's overall supply allocation shares are per the chart below:

You can buy the THRUST token on Bybit's Spot market as a 

. You can also take advantage of Bybit's 

 campaign to earn a share of the total 2 million THRUST prize pool. To qualify for a 200 THRUST reward, new users need to either deposit at least 500 THRUST, or deposit at least 100 USDT and trade 100 USDT worth of THRUST via their first Spot trade. Meanwhile, existing Bybit account holders can also earn a reward of up to 1,000 THRUST by trading at least 500 USDT worth of THRUST on the Spot market. The campaign runs through Dec 10, 2024, 8:59PM UTC.

Automated market makers (AMMs) have experienced rapid growth ever since the introduction of the concept by Uniswap in 2018. The concentrated liquidity model, again championed by the Uniswap DEX, has added further options and versatility for LPs. However, inflexible fee structures and poor user interfaces have dogged the broader adoption of both liquidity provision and token swaps on AMMs for years. 

Thruster Finance is a timely addition to the AMM DEX landscape, with advantages like a beginner-friendly interface, different fee tiers based on the specifics of each pool, and an array of additional rewards — Blast Gold and Blast Points, as well as app-specific credits.

Thruster offers a comprehensive suite of options for DeFi veterans, as well as for those new to AMM-based liquidity provision or token trade. All that Thruster needs now is wider recognition and adoption by the DeFi user community — never an easy job in a competitive field where the likes of Uniswap, 

thruster finance.png

Thruster (THRUST): An Advanced AMM for the Blast Ecosystem

Altcoins

Crypto

The Kusama coin (KSM) is crucial in the maintenance and operation of the Kusama network. Find out what makes this crypto special.

The blockchain industry is ever-growing, with new and better developments being launched on a daily basis. This naturally results in a need for innovations that improve the performance of existing blockchain projects. It’s necessary to evaluate these innovations regularly in order to tackle potential weaknesses and vulnerabilities that may undermine the efficiency of a project. This is the main goal that Kusama sets out to achieve: to ensure that all project improvements made are fit for 

Kusama is built with substrates and codes similar to those of 

. Often referred to as “the canary network of Polkadot,” Kusama is an evolutionary and multi-channel network designed to facilitate an audit system for Polkadot. How does the audit system work? Well, Kusama welcomes new features and experiments with them before said features are rolled out to Polkadot.

Most blockchain ecosystems only use a test network to develop their decentralized applications (DApps) and projects. Kusama, however, provides a functional market and test network conditions that other chains don’t provide. Kusama also benefits from modified governance parameters that allow it to operate up to four times faster than the Polkadot ecosystem.

Kusama uses two types of blockchains to process transactions and manage network activity. The main network, on which the validators are located, is called the relay chain. The relay chain has minimal functionality and is responsible for coordinating the system as a whole. Parachains, on the other hand, are unique and allow users to run separate Layer 1 blockchains with the Kusama network. Being able to run these single layers linked to the relay chain ensures the security of the 

 and significantly increases the scalability and interoperability of the Kusama network. There are also user-generated networks called parachains that may each have different architectures, features and use cases, depending on the project using each one. We’ll explain these in detail later on in this guide.

The KSM token is the native cryptocurrency of the Kusama network (just as DOT is the native token of the Polkadot network). The initial distribution of this token respects the same DOT token distribution. Essentially, this means that if you’ve participated in the 

, you’ll have access to the same number of KSM tokens that you purchased in the DOT ICO. This serves to encourage token holders to use the Kusama network and help the team in its development. However, perhaps the biggest change in Kusama is related to the generation of tokens via network rewards.

The KSM coin is a governance token to manage protocol updates and patches and pay fees through parachains. Validators stake their KSM to ensure network security and earn inflation rewards, while nominators can use their KSM to show support to certain validators and receive a share of the rewards. In addition, the KSM cryptocurrency can be used for linking to support new parachains.

You can buy KSM tokens on various leading crypto exchanges, including Bybit. However, this isn’t the only way to get KSM coins. Kusama has aligned itself with the Polkadot community by offering KSM tokens to anyone who’s purchased DOT during its ICO. Those who own a DOT indicator token can follow these instructions to claim an equal amount of KSM. There’s no deadline by which to claim the KSM tokens.

 If you have a project that will increase the value of the network, you can submit a cash flow proposal.

 The bug bounty program rewards anyone who discovers vulnerabilities in Kusama’s code.

 Validators can claim rewards for running the validation node. The number of KSM needed to become a validation node is dynamic, changing over time. 

 Kusama nominators play a passive investor role by delegating their KSM to a maximum of 16 validators. For this, they receive rewards which are dynamic and evolve. 

The governance of the Kusama network lies primarily in the hands of three groups: the referendum chamber, the council, and the technical committee.

 This is the group that submits proposals for change, and votes on these proposals to see which ones will move forward. They also vote for board members, and can apply to become board members themselves.

 The council has 13 members elected to represent Kusama holders, who remain passive. A vote is held every 24 hours to determine the members of the board. The council is responsible for electing the technical committee.

 These members are elected by the board. The committee can include blockchain developers or development teams, and its role is to determine the degree of importance of each proposal. They ensure that urgent proposals are voted on and implemented first.

The referendum chamber may make a public proposal, or the council may submit its proposals, while the technical committee may submit emergency proposals. These three actors can potentially lead to implementing changes in 

The main aspect of governance is the referendum, which determines whether or not to make changes to the protocol. It’s possible to make several changes by referenda, such as altering the parameters of the network, registering or deregistering a parachain, voting on the financing of a project by the public Treasury, and many others.

On Kusama’s network, the referenda are voted on every seven days. The proposal supported by the greatest number of interests is deemed the most important, and becomes a referendum. This process alternates between public and council proposals, so that neither has priority.

Once a proposal becomes a referendum, anyone interested can vote for or against it. If the referendum is adopted, it’s promulgated after a waiting period of seven days. Kusama uses a new voting concept called “Adaptive Quorum Biasing” that makes passing a proposal easier or more difficult, depending on the governance group that submitted it and the number of voters who vote.

In short, when the turnout is low, the protocol requires a supermajority decision to reject proposals, as well as less total passing votes to pass proposals. Still, when the turnout increases to around 100%, it becomes a simple majority.

Kusama includes a logic that allows its governance system to deal with unforeseen events that require rapid legislative changes. This type of legislative “short circuit” makes it possible to submit a proposal to a referendum immediately, in parallel with the normal monthly proposals. 

In case of approval by a supermajority (more than three-quarters) of the council, and a two-thirds approval of the technical committee, a bill can then be accelerated. It’s immediately voted on in the referendum chamber, with a much shorter than normal voting time (three days) and a promulgation period close to zero. The approval mechanisms, in this case, are unchanged from what they normally would be (a simple majority or, in the case of unanimous counsel, a default deferral). This mechanism should be sufficient for non-contentious bug fixes and technical upgrades.

The common goal of all users in Kusama is to maintain and develop the network. As with Polkadot, anyone can participate in the Kusama network, in several different ways. However, there are two major classes of participants who play specific roles in its overall operations: builders and network managers. Since the Kusama network works like Polkadot, it’s operated and maintained by the same set of users.

These users are allowed to build and customize their applications on Kusama before deploying them to Polkadot. Thus, they can apply the same logic to the Polkadot network that got the best and most effective result of their experiments on Kusama.

Builders create parachains, bridges, parathreads and other elements on the network. They are essentially the development teams and individual developers. Here’s why development teams might consider using Kusama for their development efforts:

Since Kusama is a canary network, developers should build the parachains on Kusama first for a testing process before deploying them to Polkadot.

Kusama (KSM) is a permissionless network; every KSM holder has the opportunity to use it. KSM holders can interact with all the features of the Kusama network. These include, for example, staking (i.e., validating or nominating), governance, parachain auctions, transfers and everything else. Anyone participating in the Polkadot sale can claim a pro rata amount of KSM through the Kusama claims process. KSM used to be publicly accessible via a so-called faucet (quasi a small coin donor), which has since been taken out of operation.

The network maintainers are responsible for maintaining and controlling the operations of the platform. This category of users includes collators who receive information from parachains and transfers to validators via new blocks for verification. These validators receive the new blocks and add them once they’ve been verified. They also engage in future activities, such as consensus with other validators. This set of users are considered the maintainers of the network because they impact the activities that take place on the network.

Kusama’s Treasury consists of funds from transaction fees, lost deposits, the inefficiency of bets and the reduction of penalties. KSM token holders can make an expense proposal by depositing 5% of the amount he proposes to spend with the Treasury. These funds are for the Kusama network. It’s up to the community to decide precisely how the cash flow funds should be spent.

For a proposal to be adopted, it must receive a favorable vote of at least 60% of the board. The deposit will be slashed if the proposal is rejected, or returned if the proposal is accepted. This process takes place every six days.

From a technological point of view, there’s little difference between a parachain and a parathread. The parachain can become a parathread, and vice versa. The real difference between the two is economic: parachains are standalone blockchains with custom tokens and functionality adapted to specific use cases. The parachain connection to the relay chain is present throughout, and the system provides full throughput. A parathread, on the other hand, is a special form of parachain that isn’t constantly associated with the relay chain, and is therefore priced based on pay-as-you-go. Kusama has adopted an operating system that organizes several specified blockchains for various purposes into a network of parachains. 

Parachains got their name from the concept of multiple chains running parallel to the relay chain. This allows them to parallelize, and scale transaction processing. The parachain places at Kusama are limited to 100. If a project wants to get hold of a parachain, it must participate in a parachain auction. Various 

 projects compete for the available places, ensuring the highest level of quality since not every team receives a parachain place. The parachains are maintained by a network maintainer, the so-called collator. The roles of the collator node are to maintain a full node of the parachain, receive all the necessary information of the parachain and produce new block candidates.

What’s so special about the parachains is that they can be adapted for any number of applications. In addition, the parachains are connected to the main Kusama blockchain (relay chain). In this way, they benefit from their network security. To create this community, Kusama uses so-called parachain slot auctions. This is a market-efficient selection of parachains that are added to the Kusama relay chain. Teams that inspire the trust of the KSM community are given preferential treatment. The final decision on everything that happens in the Kusama network (including the timing of the parachain slot auctions) is finally made by the Kusama council and the KSM stakeholders.

How Does the Kusama Parachain Auction Work?

The parachain auction is how projects bid to obtain a parachain on the respective networks. This auction is done through the candle auction process, which dates back to the sixteenth century when auctions were allowed until a real wax candle went out. Uncertainty about the actual end time of the auction was used to reduce bid sniping (this is bidding at the last moment), which was a problem even then. In auction sniping, bids are tightened at the last possible moment so that other participants don’t have the opportunity to react with a higher bid.

When combined with blockchain technology, this method has proven, beneficial properties, especially for achieving efficiency. It’s therefore considered an appropriate mechanism for allocating parachain slots on both Polkadot and Kusama. Unlike the old-style candle auction, the end is determined retrospectively. This means that the auction always has a set, fixed duration to continue bidding, and the actual end block (“terminal block”) is determined randomly only after that time.

Typically, these auctions take place over seven days. The first Kusama parachain was auctioned off in June, and Karura was the highest bidder in this auction. Karura network is an autonomous and all-in-one 

 platform for the Kusama ecosystem. It offers services such as loans, interest, liquid staking, the introduction of stablecoin, and an autonomous exchanger (AMM 

As of early September 2021, KSM was trading at $395.92, according to CoinMarketCap. [

: With the recent downturn in the crypto market, KSM is trading at around $344 as of September 22, 2021.]

 of Kusama is approximately$2.9 billion from a 

How Do I Take Part in Kusama Crowd Loans?

A crowd loan can be similar to a participatory loan. It’s a “fundraising-type” crowdfunding, but in the form of a loan for the duration of a parachain. This allows a project to collect the sum, or part of the sum, necessary (in DOT or KSM loaned) for bidding and obtaining a parachain during auctions on Polkadot or Kusama. 

Therefore, to participate in a Kusama crowd loan, you must identify a specific project that wants to buy a parachain. While the process may differ with each project, they’re all fairly straightforward. Specifically, tokens (KSM in this case) are collected on behalf of the teams, and remain under the custody and security of the “relay chain.” Participating in a crowd loan campaign is safe and secure for users, who can be sure to receive their contributions on one of the two predefined dates.

Kusama and Polkadot are blockchains that operate independently and have different functions. Kusama is more flexible, faster in its governance and more economical to deploy code than its counterpart, Polkadot. On the other hand, Polkadot is more stable, secure and conservative than Kusama. Eventually, the two blockchains will be connected through a bridge, enabling interoperability.

Many parts of the two networks’ codes are identical. – They share the same architecture, nominated Proof-of-Stake (NPoS). Polkadot and Kusama are independent and autonomous networks with different strategies. Kusama is the ideal network for bold experimentation and deployment at an early usage stage, while Polkadot is more conservative, prioritizing stability, security and reliability. 

Governance on Polkadot and Kusama is designed to be fully decentralized and without permission, giving a say in how the network is managed to anyone with the native token (DOT for Polkadot, KSM for Kusama). Thus, over time, the networks will evolve independently, converging or diverging according to their respective communities’ decisions.

The key technical difference between Polkadot and Kusama is that Kusama has changed the governance settings, which allows for very fast upgrades. The Kusama network can be adjusted on short notice should the community decide to implement any changes. Additionally, Kusama is up to four times faster than Polkadot, with a seven-day voting period for KSM holders, followed by seven days to enact the blockchain referendum. On Polkadot, this period is four times longer: the voting period lasts 28 days, followed by a period of promulgation of 28 days. Note, however, that Polkadot will always be the main network for the deployment of applications. 

The Kusama initiative has several advantages and benefits for network users. First, it offers a quick iteration process and allows developers to explore new technologies and ideas that could significantly impact the market. Second, it allows developers who intend to deploy certain applications and parachains on the Polkadot network to predict the performance of planned innovations, based on their experiences on Kusama that have allowed them a testing period.

Over the past year, KSM’s price saw an increase of over 1,124%, from $30 in August 2020 to about $386 in September 2021. KSM hit an all-time high of $623 on May 18, 2021, smarking a 1,242% gain in less than a year of trading. 

 continues to gain mainstream popularity, the need for viable testing platforms like Kusama is now greater than ever. Built to support the growing Web 3.0 ecosystem, Kusama has characteristics almost identical to those of Polkadot. It’s instructive to see how the protocol works independently from the Polkadot network, while complementing Polkadot’s growing system at the same time.

The platform presents a system of democratic functioning which allows for radical innovations. It also allows developers to initiate their specific blockchains from multiple sources and connect them to the main network. Kusama includes the latest and most effective technological tools introduced by the Web3 Foundation and Parity Technologies. It allows developers to use the blockchain facilities provided by the testnet. This helps them launch their blockchain with fast iteration and a well-audited process before deploying to Polkadot, which makes Kusama an integral part of the success DeFi projects enjoy. 

Kusama is a network that functions as a test environment. Developers can experiment and analyze the effectiveness of their code before proceeding with the official launch on the Polkadot network. The Kusama infrastructure allows developers to take advantage of both a more flexible governance system and lower staking requirements than the Polkadot network. Overall, Kusama is a great platform for testing using parachains.

Kusama Coin (KSM): Everything You Need to Know

Grab Up to 5,000 USDT in Rewards

Grab Up to 5,000 USDT in Rewards