What is going on with KUSAMA, why so stuck?

By September 7, 2021Polkadot
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  • r/Kusama - Polkadot & Kusama Kraken Analysis

I don’t keep the fact hidden than I am a very large believer in the Polkadot and Kusama ecosystems. I thought I would give a quick summary as to why their inflationary measures are actually a positive thing.

The main goal of the inflationary system as I see it, is to encourage active participation. What this means is that first and foremost you are encouraged to stake your tokens. Just doing this will reward you as the staking rewards (roughly 15%) is higher than the inflationary rate (roughly 10%). The only people that are penalized are the owners that do nothing with their tokens.

The reason staking is so important is because it secures the network. Some exchanges make this a very passive experience, but other platforms require you to be more attentive as you may need to update your nominations. Usually the more active you are, the better returns you can find.

Another reason being an active participant is important is that your tokens grant you a proportional opportunity to vote. In theory, this should give everyone a bit of a voice to vote on impactful changes.

Last but not least, and the real beauty to these projects are the crowdloans. This also requires active participation, but it encourages people to vote for the projects they like and believe to be in the best interest of the ecosystem as a whole. As a reward to your “vote” you get tokens at the inception, and if you’ve paid attention to the first five auctions, you would have made a lot of money for essentially a risk-free loan.

So, if you want to be a lazy investor, then I agree, a fixed supply sounds like your best bet. But if you are passionate about the projects like a lot of us are, then the sky is the limit with both DOT and KSM.


r/Kusama - Polkadot & Kusama Kraken Analysis
r/Kusama - Polkadot & Kusama Kraken Analysis

I don’t keep the fact hidden than I am a very large believer in the Polkadot and Kusama ecosystems. I thought I would give a quick summary as to why their inflationary measures are actually a positive thing.

The main goal of the inflationary system as I see it, is to encourage active participation. What this means is that first and foremost you are encouraged to stake your tokens. Just doing this will reward you as the staking rewards (roughly 15%) is higher than the inflationary rate (roughly 10%). The only people that are penalized are the owners that do nothing with their tokens.

The reason staking is so important is because it secures the network. Some exchanges make this a very passive experience, but other platforms require you to be more attentive as you may need to update your nominations. Usually the more active you are, the better returns you can find.

Another reason being an active participant is important is that your tokens grant you a proportional opportunity to vote. In theory, this should give everyone a bit of a voice to vote on impactful changes.

Last but not least, and the real beauty to these projects are the crowdloans. This also requires active participation, but it encourages people to vote for the projects they like and believe to be in the best interest of the ecosystem as a whole. As a reward to your “vote” you get tokens at the inception, and if you’ve paid attention to the first five auctions, you would have made a lot of money for essentially a risk-free loan.

So, if you want to be a lazy investor, then I agree, a fixed supply sounds like your best bet. But if you are passionate about the projects like a lot of us are, then the sky is the limit with both DOT and KSM.

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