Kaspa: PoW BlockDAG Cryptocurrency Based on the GHOSTDAG Protocol

What is Kaspa

Friend, imagine the highways we use every day—traffic flows endlessly, but if there’s only one lane, no matter how wide, it gets jammed. Traditional blockchains, like Bitcoin, are like this “single-lane” digital ledger, where transactions are processed one after another in a queue. Kaspa (KAS for short), on the other hand, is like a “multi-lane highway” in the blockchain world.

It’s a decentralized, open-source digital currency project that officially launched in November 2021. The most unique aspect of Kaspa is that it doesn’t use the traditional “chain” structure, but instead adopts a structure called “BlockDAG”. Simply put, it allows many “blocks” (think of them as ledger pages recording transactions) to be created and confirmed simultaneously, rather than queuing up one after another like traditional blockchains. This way, Kaspa can process a large number of transactions at the same time, just like a multi-lane highway, greatly improving speed and efficiency.

Its goal is to address the challenges of scalability, security, and transaction speed faced by traditional blockchains. Currently, Kaspa can process about 10 blocks per second, and in the future, it aims to reach speeds of 32 or even 100 blocks per second. This means your transaction confirmation time will be extremely fast, almost only limited by your internet speed.

Project Vision and Value Proposition

Kaspa’s vision is to become a fast, scalable Layer-1 blockchain. Its core value proposition is to achieve extremely high transaction throughput while maintaining decentralization and security. Imagine a payment system that is both secure and fast, able to instantly complete large transactions like swiping a credit card—that’s the goal Kaspa wants to achieve.

It aims to be “the fastest pure Proof-of-Work (PoW) cryptocurrency” and provide a scalable Layer-1 solution. Kaspa’s launch was extremely “fair”—there was no pre-mining, no presale, and no token allocation for the team or developers. This means all tokens are generated through mining, ensuring decentralization and fairness, just like Bitcoin’s original design philosophy. It’s a community-driven, open-source project with no central authority in control.

This design makes Kaspa very suitable for scenarios requiring real-time transactions, such as decentralized finance (DeFi), gaming, and payment networks. The KAS token serves as both a medium of exchange and a store of value within the network.

Technical Features

BlockDAG Architecture and GHOSTDAG Protocol

Kaspa’s core technological innovation is its BlockDAG (Directed Acyclic Graph) architecture and the GHOSTDAG protocol. Traditional blockchains are like a string of beads, where each block (bead) must be connected in order. If two miners produce blocks at the same time, one gets “orphaned” and discarded—this is called an “orphan block.”

Kaspa’s BlockDAG, however, is like a mesh structure, allowing multiple blocks to exist and be accepted by the network simultaneously. The GHOSTDAG protocol acts as the “traffic controller” of this mesh, intelligently identifying all valid parallel blocks and sorting them according to specific rules, rather than simply discarding them. This enables Kaspa to process transactions much faster than traditional blockchains, while still maintaining security.

Consensus Mechanism

Kaspa uses the Proof-of-Work (PoW) consensus mechanism, just like Bitcoin, relying on miners’ computational power to secure the network. It utilizes a mining algorithm called kHeavyHash. Combined with the GHOSTDAG protocol, Kaspa achieves higher transaction throughput and faster confirmation speeds on top of PoW security.

Performance and Future Development

Currently, Kaspa’s mainnet can process 10 blocks per second. Its core developers are rewriting the project code from Go to Rust, which is like upgrading a car’s engine, further boosting performance and efficiency, and laying the foundation for the future goal of 100 blocks per second. Additionally, Kaspa plans to support smart contracts and Layer-2 solutions, enabling it to host more complex decentralized applications.

Tokenomics

Token Information

• Token Symbol: KAS
• Maximum Supply: Approximately 28.7 billion KAS tokens.
• Issuance Mechanism: KAS tokens are generated and issued entirely through Proof-of-Work (PoW) mining.
• Fair Launch: At launch, Kaspa had no pre-mining, no presale, and no token allocation for the team or investors, ensuring fair token distribution.

Issuance, Inflation/Burn

Kaspa’s token issuance follows a unique and smooth reduction schedule called the “chromatic phase”. The block reward decreases monthly at a fixed rate ((1/2)^(1/12)), which is equivalent to halving once a year, but the process is much smoother, unlike Bitcoin’s sudden halving. This design aims to ensure long-term sustainability of token supply and provide stable incentives for miners. As of May 2025, over 90% of KAS tokens have already entered circulation through mining.

Token Utility

KAS tokens serve the following main purposes within the Kaspa network:

• Medium of exchange and store of value: KAS can be used for payments and value transfers within the network.
• Network security incentives: Miners maintain network security by contributing computational power and receive KAS as rewards.
• Paying transaction fees: All transactions on the Kaspa network require a small amount of KAS as fees.

It’s worth noting that Kaspa currently does not offer staking or liquidity mining mechanisms; all incentives are based on Proof-of-Work.

Team, Governance, and Funding

Core Team

Kaspa’s origins trace back to DAGLabs, a research company co-founded by Dr. Yonatan Sompolinsky (Harvard University) and backed by Polychain Capital. Dr. Sompolinsky’s research, together with Professor Aviv Zohar (Hebrew University), laid the foundation for scalable Proof-of-Work protocols. Other core contributors and developers include Aviv Zohar, Guy Corem, Michael Sutton, Shai Wyborski, Mike Zak, Elichai Turkel, and Ori Newman.

DAGLabs was dissolved around the time of Kaspa’s fair launch (November 2021), and the project transitioned to a decentralized, community-led model. Today, Kaspa’s ongoing development and research are driven by a global contributor community.

Governance Mechanism

Kaspa is a truly community-driven, open-source project with no central team, foundation, or on-chain voting mechanism. All upgrades and changes are decided and adopted through global community discussion and consensus. This open development model and the protocol’s forkability ensure that no single entity can unilaterally control Kaspa’s future, preserving its decentralization and neutrality. Community members actively participate in decision-making, crowdfunding, and ecosystem promotion.

Funding

The Kaspa project itself had a “fair launch,” with no pre-mining or initial coin offering (ICO). While DAGLabs initially received investment from Polychain Capital, Kaspa as a project is described as an “unfunded company,” having not raised funds through traditional means. However, the community supports some development projects through crowdfunding—for example, the Rust rewrite is community-funded. Additionally, Kaspa has a treasury (multi-signature wallet) managed by four community-elected members for handling public donations.

Roadmap

Kaspa’s roadmap demonstrates its ambition for continuous innovation and expansion:

Key milestones completed:

• November 2021: Fair project launch, no pre-mining or presale.
• May 2022: “Chromatic phase” monetary policy activated, token issuance begins smooth reduction.
• April 2023: ASIC miners enter the Kaspa mining ecosystem.
• Spring 2025 (May): Crescendo hard fork successfully implemented, increasing block processing speed from 1 per second to 10 per second.

Ongoing and future major plans:

• DagKnight protocol: An evolution of the GHOSTDAG protocol, aiming for more deterministic transaction ordering, better handling of global network latency, and paving the way for smart contract implementation.
• Rust rewrite: Migrating core code from Go to Rust to significantly improve performance and efficiency, laying the foundation for the goal of 100 blocks per second.
• Smart contracts and Layer-2 solutions: Plans to introduce smart contract functionality and integrate Layer-2 solutions, such as Kasplex L2 zkEVM rollup, to support more complex decentralized applications.
• Mobile wallet and Ledger hardware wallet support: Mobile wallet development is underway, and support for Ledger hardware wallets has been completed.
• Improved archival nodes: Optimizing archival nodes for better access to historical data.
• ZK Layer (L1<>L2 Bridge): Exploring zero-knowledge proof (ZK-rollup) architecture, enabling Kaspa L1 to serve as the ordering, data availability, and settlement layer, supporting scalable privacy-preserving applications.
• Oracles: Leveraging Kaspa’s high block processing speed to build a robust real-time data proof network.
• Higher block processing speed: The long-term goal is to gradually increase block processing speed to 32 per second, ultimately reaching 100 blocks per second.

Common Risk Reminders

Every blockchain project carries risks, and Kaspa is no exception. When learning about the project, pay attention to the following points:

Technical and Security Risks

• ASIC centralization risk: As application-specific integrated circuit (ASIC) miners become more widespread, mining power may concentrate among a few entities with significant capital or manufacturing capabilities, potentially reducing network decentralization.
• Governance complexity: Kaspa’s governance relies on community consensus, with no on-chain voting mechanism. While this aligns with the spirit of decentralization, it may also slow decision-making and affect rapid development and innovation.
• Technical implementation risk: Complex technologies like the DagKnight protocol and Layer-2 solutions may encounter unforeseen technical challenges or delays during development and deployment.

Economic Risks

• Market volatility: Like all cryptocurrencies, KAS’s price is affected by market supply and demand, macroeconomic conditions, regulatory policies, and other factors, and may experience significant fluctuations.
• Intense competition: The blockchain space is highly competitive, and Kaspa faces competition from many existing and emerging blockchain projects, requiring continuous innovation and differentiation to stand out.
• Adoption risk: The project’s long-term success depends on whether its technology is widely adopted and whether it can build a vibrant ecosystem.

Compliance and Operational Risks

• Regulatory uncertainty: The global regulatory environment for cryptocurrencies is still evolving, and future policy changes may impact the Kaspa project.
• Audit coverage: While some projects in the Kaspa ecosystem (such as Kaspa Finance, Kasplex, Kaspa Nexus) have audit reports, the comprehensive audit status of the core protocol itself requires further attention.

Remember, the above risks are not exhaustive. Investing in cryptocurrencies always carries risks, so be sure to conduct thorough personal research.

Verification Checklist

• Block Explorer:
  • Kaspa official block explorer: kas.fyi
  • Other block explorer: blockexplorer.one/kaspa
• GitHub Activity:
  • Kaspa’s GitHub repository, especially its Rust implementation (kaspanet/rusty-kaspa), shows active development.
  • Research-related repositories (kaspanet/research) and improvement proposals (kaspanet/kips) are also kept up to date.
• Audit Reports:
  • Kaspa Finance, Kasplex (L2), and Kaspa Nexus ecosystem projects have published audit reports.
  • CertiK platform shows Kaspa core project as “not audited by CertiK,” but records “third-party audit: yes.” It is recommended to review specific third-party audit reports for details.

Project Summary

Kaspa is a distinctive project in the blockchain space, aiming to break through the speed and scalability bottlenecks of traditional blockchains through its innovative BlockDAG architecture and GHOSTDAG protocol, while upholding decentralization and Proof-of-Work security. Its “fair launch” and community-driven governance model reflect respect for the core spirit of cryptocurrency.

Kaspa’s vision is to provide a Layer-1 platform capable of supporting high throughput and fast confirmations, making it promising for real-time payments, DeFi, and gaming applications. With key roadmap developments such as the Rust rewrite, DagKnight protocol, and smart contracts, Kaspa is poised to further enhance its technical strength and ecosystem functionality.

However, like all emerging technology projects, Kaspa faces challenges such as ASIC mining centralization, community governance efficiency, and market competition. For anyone interested in Kaspa, it is strongly recommended to study its whitepaper, official documentation, and community discussions in depth to fully understand its technical details, development direction, and potential risks. Remember, this is not investment advice—the cryptocurrency market is highly volatile, so please make decisions carefully based on your own situation.