- Kaspa’s KIP-02 upgrade transitions its consensus mechanism to DAGKNIGHT, increasing transaction efficiency and enhancing network resilience.
- The Crescendo hard fork aims to increase block production to 10 BPS, improving scalability and transaction throughput.
Kaspa (KAS) is undergoing a series of upgrades designed to improve its scalability, transaction efficiency, and overall network utility. With recent developments focused on faster block production, protocol optimizations, and smart contract integration, the network seeks to enhance its competitive positioning in blockchain infrastructure.
The upcoming protocol adjustments and hard fork implementation could impact transaction throughput, mining economics, and broader adoption. These advancements may influence market perception as Kaspa transitions toward a more efficient and developer-friendly architecture.
Consensus Protocol Refinements: The Transition to DAGKNIGHT
Kaspa’s Proof of Work (PoW) consensus model, based on blockDAG technology, allows for parallel transaction processing. Currently, the GhostDAG protocol handles block ordering, but the proposed KIP-02 upgrade aims to replace it with DAGKNIGHT (DK).
This shift introduces Byzantine fault tolerance up to 50%, improving both security and processing speed. Unlike traditional blockchain models, DK does not rely on fixed latency parameters, making it more resilient against network disruptions.
The transition from sequential block generation to a more interconnected block structure is expected to enhance network responsiveness and reduce confirmation delays.
Scaling Block Production to 10 BPS with Crescendo Hard Fork
One of the most impactful updates is the Crescendo hard fork, which aims to increase block production rates from 1 to 10 blocks per second (BPS). Already in testnet under TN11, this upgrade seeks to improve transaction scalability while resolving congestion issues.
The hard fork is scheduled for early 2025, ensuring thorough testing before activation on the main network. Developers confirm that Kaspa’s infrastructure is capable of sustaining the increased block rate, potentially enhancing transaction processing efficiency while maintaining network stability.
Smart Contract Capabilities and Token Standard Expansion
Although still in the planning phase, Kaspa’s long-term roadmap includes smart contract integration to support decentralized finance (DeFi) applications, dApps, and other programmable assets. Two potential implementation paths are being considered:
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- Native smart contract execution on Kaspa’s base layer.
- A Layer-2 (L2) solution connected to Ethereum for interoperability.
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In December 2024, the introduction of KRC20 tokens—similar to Ethereum’s ERC20 standard—marked the first step toward building a broader smart contract infrastructure. While KRC20 tokens do not enable full smart contract functionality, they provide a foundation for asset creation and network experimentation.
Mining Profitability and Economic Implications
Kaspa’s mining sector has experienced profitability fluctuations, with ASIC mining returns dropping compared to assets like Bitcoin (BTC) and Dogecoin (DOGE). While KAS mining once generated $100 per day in early 2024, current net earnings have declined to around $3.35 per day, while DOGE and BTC miners report $42 and $22 daily, respectively.
If Kaspa’s network improvements enhance transaction flow and overall adoption, increased demand for KAS tokens could potentially impact mining incentives. Higher network usage and broader adoption of KRC20 tokens or smart contract applications may influence token valuation, leading to shifts in mining profitability.
Kaspa (KAS) is currently trading at $0.1236, reflecting a 1.31% increase in the last 24 hours. Its market capitalization stands at $3.15 billion, with a 24-hour trading volume of $78.16 million, marking a 7.47% increase. The circulating supply is 25.49 billion KAS, with a maximum supply of 28.7 billion KAS.
Recent developments include unlocking $21.39 million in tokens, further expanding the ecosystem and security. Additionally, Kaspa is aiming for a potential ETF launch in 2025, which could boost institutional interest and long-term adoption.
Despite slight price fluctuations in recent days, Kaspa has demonstrated strong community engagement and ongoing technological advancements.
Given its upward momentum, technological competitiveness, and increasing adoption, KAS could potentially reach the $0.14 – $0.16 range in the short term, assuming the current bullish trend persists.
