Kaspa (Digital Silver) Revolutionizing the cryptocurrency landscape with BlockDAG Architecture

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Kaspa is an innovative entrant in the expansive field of distributed ledger technology (DLT), distinguishing itself by leveraging a unique BlockDAG architecture as opposed to the traditional blockchain structure that underpins many other cryptocurrencies. Unlike typical blockchain-based systems that extend linearly, creating a single chain of blocks, Kaspa’s BlockDAG creates a web-like structure, enabling a higher degree of scalability and speed. This marks a significant departure from traditional blockchain concepts, presenting an alternative perspective on how a decentralized, secure, and robust digital ledger could function.

A brief history of Kaspa’s creation and evolution

The inception of Kaspa can be traced back to the visionary work of its founders, spearheaded by Shai Wyborski and Yonatan Sompolinsky. With strong academic backgrounds in cryptography and computer science, they set out to tackle the well-known scalability issues plaguing the blockchain realm. Inspired by earlier work on DAG (Directed Acyclic Graph) technologies and recognizing their potential, they incorporated the DAG concept into their unique BlockDAG structure, birthing the Kaspa protocol.

Kaspa’s journey from a conceptual idea to a functional distributed ledger has been a blend of rigorous academic research, technological creativity, and meticulous development, possibly sparking a paradigm shift and further widening the horizon of possibilities within the digital world. Its evolution and growth are testament to the adaptability and progressive nature of the DLT space, continually reshaping to meet the demands of an increasingly digital society.

Choosing the BlockDAG architecture over traditional blockchain

The rationale behind choosing the BlockDAG architecture over traditional blockchain was firmly grounded in the limitations inherent to blockchain systems. Blockchains, despite their revolutionary impact, face a trilemma of scalability, security, and decentralization – increasing one often results in decreasing the others. In contrast, the BlockDAG structure used by Kaspa attempts to strike a balance between these three dimensions, striving for an optimally performant, secure, and decentralized system.

As the landscape of cryptocurrencies continues to evolve, it is clear that innovations like Kaspa are pivotal in pushing the boundaries of what these technologies can offer. Beyond its technical prowess, Kaspa’s emphasis on community-driven expansion and decentralized development have also laid the foundation for a unique and organic growth model, making its evolution in the crypto world a fascinating journey to explore.

In the following sections, we will delve deeper into Kaspa’s value proposition and technical nuances, from its innovative BlockDAG architecture to its unique emission model and more, all to appreciate how it is set to bring about significant change within the DLT landscape.


BlockDAG Architecture


Kaspa aims to build a consensus protocol that operates at internet speed, surpassing the limits of Satoshi’s protocol yet adhering to all the very same principles embedded in Bitcoin. It is the world’s first blockDAG – a ledger architecture enabling parallel blocks & instant transaction finality.

Explanation of BlockDAG (Block Directed Acyclic Graph)

BlockDAG, an acronym for Block Directed Acyclic Graph, is an innovative approach to distributed ledger technology that takes the underlying principles of blockchain and expands upon them to address some of their inherent limitations. To truly appreciate the significance of BlockDAG, it’s vital to first understand what it is and how it differs from traditional blockchain structures.

In a conventional blockchain, transactions are grouped into blocks, and these blocks are added sequentially, forming a linear chain. This design ensures that each transaction has a definite order in the chain, which eliminates the possibility of double-spending. However, this linearity brings along significant drawbacks, particularly in scalability and transaction speed.

A DAG allows for multiple chains of blocks to coexist and validate each other. And a BlockDAG is a specific type of DAG, where the vertices of the graph are blocks, not individual transactions. The BlockDAG structure can be visualized as a web or network of blocks where blocks can reference multiple predecessors, not just one.

Comparison of BlockDAG to traditional blockchain

This approach to structuring the ledger gives rise to several advantages and unique qualities. Firstly, it enables higher throughput. Traditional blockchains are often throttled by the rate at which blocks can be added to the chain. In contrast, BlockDAGs allow for concurrent block creation and addition, massively improving the potential transaction speed and overall scalability of the system.

Moreover, BlockDAG significantly mitigates the limitations associated with the “longest chain rule” used in traditional blockchains. In the traditional blockchain model, only the blocks in the longest chain are considered valid, with the others deemed “orphaned blocks”. This results in a significant waste of computational resources, as the work done on these orphaned blocks is effectively discarded. In contrast, the BlockDAG model incorporates all blocks into its structure, reducing hashrate waste and making the system more efficient.

Furthermore, the BlockDAG structure, as implemented by Kaspa, creates a more egalitarian mining process. In traditional blockchains, the block creation process is often a race among miners, with only the first to solve the cryptographic puzzle reaping the block rewards. This results in a system where powerful miners often dominate, leading to centralization. However, with BlockDAG’s concurrent block creation, even miners with less computational power can contribute and earn rewards, fostering a more decentralized network.

Advantages and unique qualities of BlockDAG

It’s also worth noting that in BlockDAG, a transaction’s security increases as more blocks reference it, either directly or indirectly. This means that transactions become more secure over time, with their acceptance in the network being more organic and gradual compared to the abrupt inclusion/exclusion in traditional blockchains.

By addressing many of the challenges posed by traditional blockchain, such as throughput limitations, wasted computational resources, miner centralization, and abrupt transaction inclusion, BlockDAG paves the way for a more efficient, decentralized, and scalable digital ledger system.


Technical Deep Dive into Kaspa

The technical core of the Kaspa protocol resides in its unique implementation of the BlockDAG structure via two complementary consensus mechanisms: the Phantom and GhostDAG protocols. Additionally, the DAGKNIGHT protocol is a recent development in the Kaspa project that further enhances its technical prowess and sets it apart.

Explanation of the Phantom Protocol

The Phantom Protocol, which is itself an evolution of Nakamoto Consensus (the first permissionless consensus protocol created by Satoshi Nakamoto in 2008) and short for “PHANTOM: A Scalable BlockDAG Protocol”, was developed by Yonatan Sompolinsky and Aviv Zohar. Phantom is designed to overcome the scalability issues plaguing traditional blockchains. It allows for concurrent block creation, contributing to higher transaction throughput. Phantom assigns each block a level according to its position in the BlockDAG, and a block’s level is a vital factor in determining the main chain within the BlockDAG.

The GhostDAG protocol and its importance

The GhostDAG protocol, which stands for Greedy Heaviest Observed Sub-Tree Directed Acyclic Graph, complements the Phantom Protocol. While Phantom’s calculation of block levels can become resource-intensive in a large and complex BlockDAG, GhostDAG provides an efficient means of approximating the main chain in such a scenario. It does this by focusing on subgraphs and identifying the “heaviest” or most worked upon one, assuming that it represents the main chain.

Kaspa’s elegant protocols naturally handles the double spend issue
One of the critical issues for any cryptocurrency network is the problem of double spending, where the same unit of cryptocurrency is spent more than once. However, through a Phantom BlockDAG (along with GhostDAG protocol), each block in Kaspa references multiple predecessors, therefore transactions that attempt to double spend will be immediately apparent due to conflicting transaction histories. The network will naturally gravitate towards honest blocks that don’t involve double spending, as they will gain more references over time, thus solidifying their place in the DAG.

Introduction to the DAGKNIGHT Protocol

Developed by Michael Sutton and Yonatan Sompolinsky, DAGKNIGHT is a significant evolution of the PHANTOM framework. The DAGKNIGHT protocol is unique in that it does not pre-assume a latency bound, unlike other Proof-of-Work-based consensus protocols. Here, DAGKNIGHT self-adjusts to real-time latency, making it more adaptable and essentially opens up new avenues for enhancing confirmation times and network efficiency.

DAGKNIGHT: A Dynamic Protocol

While the existing Kaspa system brings an inventive approach to the table, it is not without its challenges. One of the main constraints of the current system is the reliance on an a priori in-protocol bound, set based on assumptions about block creation rates and network latency. This constraint can lead to slower confirmation times and restrict the system’s scalability.

In layman’s terms, an “a priori protocol bound” refers to predefined limitations or parameters set within a protocol. In general, these parameters could include aspects like latency, block size or block creation rate. They are typically set in advance (a priori) based on certain assumptions about how the system will operate. Predefined parameters can limit the system’s ability to adapt to changing conditions. For instance, if there’s a sudden increase in transaction volume, an a priori protocol bound on block size or block rate could lead to slower transaction times and decreased efficiency.
In contrast, a system without an a priori protocol bound (a parameterless system) has more flexibility to adapt to changes in real-time, potentially leading to improved performance and efficiency.

The DAGKNIGHT protocol presents a viable solution to these limitations: by discarding the a priori bound, the protocol dynamically adapts to network conditions in real-time, thereby fostering faster confirmation times and improved network efficiency.

Pioneering DLT

Overall, the technical foundations of Kaspa – with the Phantom and GhostDAG protocols, on the BlockDAG structure and the inherent approach to solving double spending – showcase a design philosophy that emphasizes scalability, security, and decentralization. It’s a vision that seeks to transcend the limitations of traditional blockchain technology, opening up new possibilities for distributed digital ledgers.

The introduction of the DAGKNIGHT protocol to the Kaspa project is a testament to the team’s commitment to continuous innovation and improvement. It not only enhances the network’s adaptability and efficiency but also reinforces Kaspa’s position as a leader in the development of advanced, secure and scalable distributed ledger technologies further solidifying its reputation as a pioneering project and influence in the field.

RustLang Rewrite

Kaspa is currently undergoing an extensive core rewrite in RustLang. This performance-oriented programming language will transform the Kaspa codebase to its purest form – enabling record efficiency & industry-leading performance, documented, modularized code for future developers, and the groundwork for smart contracts.
The Rust rewrite will introduce unprecedented throughput, with initial estimates targeting 32 blocks per second (one block every ~31 milliseconds), with future projections of 100 blocks per second. Kaspa – after the Rust rewrite – will be the fastest & highest throughput decentralized network in the industry.

Current Developments

The lead developer of Kaspa has recently provided an update on the project’s progress, estimating that these significant changes to the system will take at least six months to implement. The team is currently working with a 10 Blocks Per Second (10BPS) client on a special test network. This network serves as a sandbox for the team, allowing them to experiment and refine the system before it is ready for a larger audience.

Before the 10BPS client can be considered for a hard-fork, a number of minor but crucial issues need to be addressed. The team is also keen to experiment with different block sizes to observe how the network adjusts. Once these issues have been resolved and a hard-fork candidate has been identified, the team will conduct extensive stress tests. These tests will monitor the system’s stability over long periods and its response to extreme conditions, such as fluctuating network conditions, significant hashrate spikes and dips, and high transaction loads.

Even after a hard-fork has been decided upon, it will not be implemented immediately. This transition is complex and will be tested multiple times on testnet before being applied to the mainnet. The team emphasizes that such changes must be made with great care and requires extensive testing, dry-runs, and coordination between several teams to minimize the risk of significant issues arising after the fork. As they venture into uncharted territory, the team is urging patience and caution.


Smart Contracts on Kaspa

Execution Layer with Kaspa

Kaspa is contemplating the incorporation of Rollups technology to facilitate smart contracts. Two potential pathways are under consideration. The first option includes complete integration of Rollups into Kaspa’s platform to bolster native smart contract operations with higher processing speeds. However, this method may require comprehensive adaption and possible forking of an existing Rollups codebase, possibly resembling Matterlabs’ zkSync, which would yield a perfectly tailored integration for Kaspa’s infrastructure.

Alternatively, Kaspa could employ a hybrid solution, acting as a sequencing layer organizing transactions with the final settlement on Ethereum. This approach would necessitate a modular Rollups codebase, allowing for the switch from Ethereum to Kaspa as the sequencing layer, with minor updates to the Kaspa consensus. This approach, modeled after Starkware’s Sharp Shared Prover, could potentially fast-track Kaspa’s advanced service offerings by leveraging Ethereum’s rich financial applications. However noted the founder, this could risk Kaspa becoming an Ethereum sidechain, potentially concentrating most economic activity on Ethereum.

Kaspa could also consider a dual strategy, mixing elements from both options, showcasing its adaptability and commitment to blockchain innovation.

Fundamental challenges of running smart contracts

Kaspa aims to balance the inherent complexity and the resource intensive nature of traditional on-chain smart contracts with the network’s overarching goals of scalability and efficiency. This is achieved through a unique interpretation of what a smart contract can be.

Traditionally, a smart contract refers to a fully on-chain smart contract, as seen in platforms such as Ethereum. While this type of smart contract offers considerable utility in automating contractual relationships, it also brings significant challenges, particularly regarding network scalability and efficiency. This is mainly because nodes must process and validate each smart contract execution, consuming significant computational resources and potentially limiting transaction throughput.

In contrast, Kaspa could introduce off-chain computation for smart contracts (perhaps akin to TrueBit – if you’re unfamiliar with this protocol, you can find my quick review here). These are a form of contracts executed outside the network but that would be secured and validated by the underlying Kaspa network. It can be as simple as an agreement between two parties that they both sign, which is then hashed and the hash is stored on the BlockDAG. Or it can be as complex as an off-chain computation whose result is then committed to the blockchain.

The idea behind off-chain smart contracts

While the complexity of smart contracts can vary widely, by executing the smart contract off-chain, the network is to be relieved from the computational burden of executing and validating the contract. This can significantly improve the scalability and efficiency of the network. Moreover, as the hash of the contract or its result is stored on-chain, the integrity and authenticity of the contract can be validated by any party at any time by comparing the stored hash with the hash of the contract.

In essence, by making such a deliberate decision, Kaspa team would be demonstrating its commitment to scalability, efficiency, and simplicity: offering the utility of smart contracts while keeping the network light and agile.


Kaspa’s Unique Emission and Mining Model

A thoughtful rapid emission model

A central tenet of Kaspa’s distinctive value proposition lies in its innovative rapid emission model and mining strategy. Unlike traditional cryptocurrencies that opt for slow and steady coin emission schedules, Kaspa’s rapid emission model front-loads the distribution of coins to the earliest miners and participants, thereby minimizing the influence of future miners on the distribution of coins. This unique approach to coin emission contributes to a more decentralized network by ensuring a broad distribution of coins from the outset. Here’s why:

Under the rapid emission model, the vast majority of coins are distributed within the first year of the network’s operation, a stark contrast to the protracted emission schedules of other cryptocurrencies. By doing so, Kaspa addresses a common criticism of standard coin distribution models: the undue concentration of coins in the hands of late-coming, large-scale miners. This early and broad distribution of coins is key to the underlying ethos of decentralization that Kaspa embraces, limiting the potential for any single entity to accumulate a majority of the coins, and hence influence, over the network.

The importance of ASIC friendliness

In addition to the rapid emission model, Kaspa’s mining approach is noteworthy for its emphasis on ASIC (Application-Specific Integrated Circuit) friendliness. This approach diverges from many other cryptocurrencies that often resist ASIC mining due to its tendency to concentrate mining power, and thus network control, in the hands of a few large-scale miners. However, Kaspa flips this script, arguing that ASICs, due to their superior efficiency and power, are an inevitability in the lifecycle of a successful cryptocurrency.

Kaspa recognizes that ASIC resistance often leads to GPU dominance instead, which doesn’t solve the centralization issue. Rather, it just shifts it onto another class of hardware. By being ASIC-friendly, Kaspa encourages the development of a competitive market for Kaspa-specific ASICs, which over time can lead to lower costs and wider distribution, thus contributing to network decentralization.

In promoting ASIC friendliness, Kaspa acknowledges that ASIC miners represent a class of dedicated and invested network participants, crucial for the long-term security and success of the network. To mitigate the risk of ASIC-based centralization, Kaspa relies on its rapid emission model, which ensures that the vast majority of coins are emitted before ASICs come to dominate the mining landscape.

Fair Launch

Kaspa’s fair launch also deserves recognition. There is no company or foundation leading the charge – which is the way a truly decentralized network should operate. As a matter of fact, Kaspa was created by DAGLabs, through investment by Polychain Capital. DAGLabs – co-founded by Yonatan Sompolinsky – was a Research & Development company focusing on scalable DAG-based protocols, and was dissolved shortly after the Kaspa launch. Despite funding from Polychain Capital, Kaspa launched with zero allocations or premine, with the key vision of being a decentralized, pure, and open initiative.

In sum, Kaspa’s unique emission and mining model underline its commitment to decentralization, community involvement, and long-term network security. By implementing a rapid emission model, promoting ASIC friendliness, and honoring a fair launch, Kaspa is creating a distinctive and promising platform in the crowded blockchain landscape.


The Role of Community in Kaspa’s Growth

The importance of the community

One of the key driving forces behind Kaspa’s impressive growth and ongoing development is its vibrant, engaged, and fast-growing community. The community’s significance cannot be overstated: from providing input and feedback to actively participating in network development, the community is an integral part of Kaspa’s journey. This focus on community involvement aligns with Kaspa’s overarching ethos of decentralization, offering a testament to the project’s dedication to empowering individuals and fostering a sense of collective ownership and responsibility.

While Kaspa’s technical underpinnings and unique architecture offer a novel approach to blockchain technology, it is the community’s passion and commitment that fuel Kaspa’s continued evolution. The team at Kaspa recognizes this, and as such, they have made concerted efforts to harness the community’s energy in a manner that decentralizes knowledge and development. This approach has facilitated an organic growth that ensures the project’s resilience and continuity, even as it scales and evolves.

Disseminating Knowledge

Kaspa aims to distribute knowledge and power to its community members, transforming them from bystanders into active collaborators. This transformation is made possible by making both the technology and the process of development transparent, comprehensible, and easily accessible. Kaspa is cultivating a community that, equipped with both knowledge and the necessary tools, can significantly contribute to the development of the project by establishing a culture that promotes learning and teamwork. (Taking inspiration from Kaspa’s ethos, I decided to actively participate in this collaborative effort by crafting this extensive yet -hopefully- easily digestible report, aiming to simplify and summarize the key aspects of this project).

Similarly, the approach to decentralizing development involves drawing on the diverse skills and talents within the community to drive Kaspa development. This is a crucial aspect of ensuring the project’s robustness and sustainability. By allowing developers from the community to contribute to the core consensus code, Kaspa is creating a truly decentralized development model that minimizes reliance on a single team or entity.

Kaspa is led by the people

These community-driven approaches to knowledge and development are rooted in Kaspa’s philosophy of being a “community coin.” As such, Kaspa’s primary objective is to serve the needs of its community, ensuring that the project’s direction aligns with the interests of its users. This philosophy is underscored in the commitment to a fair and broad distribution of coins, further enhancing the sense of collective ownership within the community.

In essence, the Kaspa community acts as the project’s heart and soul, a vibrant ecosystem where knowledge is shared, ideas are cultivated, and innovation flourishes. The symbiotic relationship between Kaspa and its community embodies the project’s commitment to decentralization, inclusivity, and collective growth, helping to solidify Kaspa’s position as a promising and distinctive player in the blockchain landscape.


Founding Team

A closer look at the driving force behind Kaspa reveals a team of exceptional academics and blockchain pioneers. While they may not have necessarily garnered the mainstream fame typically associated with involvement with big tech players, their contributions within academia and the blockchain realm have been nothing short of extraordinary. This team, spearheaded by Yonatan Sompolinsky, is revered in the inner circles for their profound research and invaluable contributions to cryptography and computer science. They represent some of the earliest architects of blockchain technology, constantly at the cutting edge of its evolution. Their standing within the blockchain ecosystem is undeniably influential.


    • Yonatan Sompolinsky: Yonatan is the founder of DAGLabs (the R&D team building infrastructure for Kaspa ) and the inventor of the GHOSTDAG protocol. He gained a reputation within the cryptocurrency academic circle back in 2013 when he and professor Aviv Zohar conceived the GHOST protocol, a protocol famous for being cited in the Ethereum whitepaper among others (Cardano, IoTa,…) as a design goal. Yonatan currently holds a post-doctoral position at Harvard researching transaction ordering protocols and MEV.

Core Developers & Researchers:

    • Michael Sutton: Michael is a Core Developer and a Distributed Systems Researcher. He got his M.Sc in computer science from the Hebrew University, where he researched parallel algorithms and distributed systems.
    • Shai Wyborski: Shai is a Kaspa researcher and one of the authors of the GHOSTDAG paper. He is a Ph.D candidate in the Hebrew University and Ben-Gurion University where he researches classical and quantum cryptography.
    • Mike Zak: Mike is a Core Developer and a Cryptocurrency and Distributed Systems Developer.
    • Elichai Turkel: Elichai is a Core Developer, an Applied Cryptographer, and a High-Performance Developer.
    • Ori Newman: Ori is a Core Developer and a Cryptocurrency and Distributed Systems Developer.

Kaspa isn’t a sudden phenomenon but rather the result of years of rigorous research and intellectual dedication. Their academic acumen and deep-rooted understanding of blockchain technology have empowered them to push boundaries and pioneer unprecedented innovations within the field. Their collective efforts have been instrumental in shaping Kaspa into an innovative and community-driven project that seeks to redefine the possibilities of this technology.



In conclusion, Kaspa is a project founded by a team who refuses to settle for the status quo. Its unique attributes, combined with a dedicated community and developers driven by innovation and inclusivity, position it as a promising player in the crypto world. While the future of any cryptocurrency is subject to various factors, Kaspa’s solid foundation, clear vision, and commitment to constant improvement suggest a bright and influential future. It is a project to watch closely, as it has the potential to contribute significantly to the ongoing evolution of blockchain technology and the broader crypto landscape.

Kaspa’s implementation of BlockDAG not only brings these theoretical advantages to life but also adds unique features and models, such as the fair emission model and the ASIC-friendly approach, reinforcing its potential to reshape the cryptocurrency landscape and break the mold of traditional blockchain frameworks. Its innovative approach to smart contract focusing on off-chain computation sets a new precedent for managing and executing smart contracts in a more scalable and efficient manner. In addition, Kaspa’s approach to decentralization and community involvement exemplifies a democratic and inclusive ethos in crypto project development, demonstrating its potential to reshape and inspire the broader crypto sphere.

The potent combination of Kaspa’s technical innovation, community-driven ethos, and research-oriented foundation instills a sense of anticipation and excitement about its potential trajectory. Kaspa is not just another cryptocurrency project; it symbolizes a significant evolution in blockchain technology, embodying the potential to redefine blockchain’s future landscape.

In a world that is becoming increasingly digital and decentralized, Kaspa is poised to rise to the occasion. The project’s future, much like the technology it embodies, is open, dynamic, and full of potential. By fostering an engaged community, advocating for a more egalitarian distribution of power and resources, and persistently pushing the boundaries of blockchain technology, Kaspa is well-positioned to take on the challenges of the future and continue to innovate in ways we may not yet fully appreciate or understand.

As the Kaspa community continues to grow and the team continues to innovate in the face of complex challenges, the project is poised to further shape the narrative of what is possible in the fast-evolving world of blockchain technology. Kaspa is a project establishing itself at the forefront of the blockchain revolution, and one that promises to continue contributing significantly to its ongoing evolution.


Final notes of the author:

It’s crucial to highlight the current state of Kaspa’s market cap. Sitting at half a billion, and up 2x this past month alone, it is an impressive testament to the interest and strength that has surrounded this project. The robustness of the community and the clear value proposition that Kaspa offers, as showcased throughout this report, certainly seems to justify such enthusiasm.

However, it’s also essential to apply a lens of realism amidst the optimism. At this stage, despite the undeniable potential, Kaspa still has everything to prove. Its smart contract layer is yet to be fully realized, and widespread adoption is still a goal on the horizon, rather than a current reality.

Therefore, while the high market cap hints at immense belief in the project’s future, one could argue that it feels somewhat overvalued at this stage. This is not to diminish the innovative strides Kaspa is making in the blockchain space, but merely to offer a balanced perspective.

The world of cryptocurrency is fast-paced and continually evolving, and there’s every chance that Kaspa could live up to its current valuation and even exceed expectations. A keen interest in Kaspa’s ongoing development and adoption progress is advised.