Kadena

What is Kadena (KDA)?

Kadena is an innovative, proof-of-work (PoW) based, decentralized blockchain project for enterprise use. It adds smart contract functionality and embodies the principles of Directed Acyclic Graph (DAG) technology to achieve performance at scale.

This decentralized network uses a multi-chain structure to scale in a way that single-chain networks like Bitcoin can’t. This is a mainstay of Kadena’s marketing as an industrially scalable project. It takes that promise seriously by adding smart contract functionality and creative ways to reduce gas fees for users.

Who are the Founders of Kadena?

Kadena was founded in 2016 by Stuart Popejoy and Will Martino, the creators of JPMorgan’s first blockchain, now known as JPM Coin. Popejoy was the leader of JPMorgan’s Emerging Blockchain group, and Martino was recruited from his role as the tech lead for the US SEC’s Cryptocurrency Steering Committee.

While credentials from institutions like JPMorgan don’t always count for much among the cryptocurrency faithful, Kadena also boasts luminaries among their advisory teams. Foremost among these is Dr. Stuart Haber, who is widely considered the inventor of blockchain technology.

Along with his partner Scott Stornetta under the banner of Surety Technologies, a spinoff of Bell Communications Research, Haber deployed the first commercial blockchain in 1995. Four years prior, they authored a paper titled “How to Time-Stamp a Digital Document,” which described a system called a blockchain.

This paper, along with two of their other works, was cited by Satoshi Nakamoto in the legendary Bitcoin whitepaper. Their three collective citations by the pseudonymous Bitcoin creator are remarkable since Bitcoin only had eight citations.

How Does Kadena Work?

Kadena is a network of blockchains. It can be thought of as a collection of multiple Bitcoin-like blockchains woven together by a shared consensus engine.

Blockchains are distributed ledger systems where transactions are bundled with a hash of the previous block to form a new block on the chain. This hash makes them immutable because changing a transaction within the block means that the hash changes.

Rather than just having a single blockchain that works in this manner, Kadena connects many blockchains in parallel. Each chain references the headers of its peer chains.

For this reason, it can scale by adding more and more parallel chains and therefore process more transactions in parallel.

Kadena also utilizes a smart contract programming language called Pact. According to the Kadena team, Pact is simple and secure enough to be used by developers of all levels of expertise. One of its main advantages is the automatic detection of bugs in the code.

What Makes Kadena Unique?

One of Kadena’s main principles is the elimination of cost and disruption for users and clients alike. One of the main “pain points” for users, and perhaps one of blockchain’s main obstacles to true mass adoption, is the need to keep wallets topped up with gas tokens.

While the concept of having to pay a fee to send transactions or use a blockchain in any way isn’t unfair, some blockchains can be downright intimidating to use. Ethereum, for example, requires configuring various parameters such as gas fees and slippage, which is no easy feat for the average user.

Kadena, however, aims to have users interact with the blockchain without accounts, wallets, or even fees. One major innovation in this regard is the gas station, an autonomous account that funds gas payments on behalf of users.

A simple example of this is the Kadena memory wall smart contract. Users can visit a web page and enter some text into a form. This text is then published via a transaction mined in the next block. No wallet or gas is required since a gas station has been set up to fund these transactions.

Each gas station can be configured differently. For example, the “gas guard” variation of gas stations only funds transactions that fall within specific gas limits and prices. Meanwhile, “gas payer” stations require the calling of certain functions or only fund selected accounts.

How is the Kadena Network Secured?

Just like Bitcoin, Kadena’s network is secured by proof-of-work consensus. This means that Kadena relies on miners, or node operators, who deploy computing infrastructure to solve for new blocks and then verify them.

Mining cryptocurrencies like Kadena entails high costs in terms of investment as well as fixed and variable costs. Therefore, it has to be incentivized via block rewards, where the miner who “wins” a block is rewarded with a certain amount of KDA.

Proof-of-work is considered a robust and secure method of securing a blockchain because potential attackers would need to take control of a large amount of mining power to be able to attack the network.

Kadena also has to weave this PoW consensus throughout its network of parallel blockchains. This is handled by Chainweb, Kadena’s consensus engine that “braids” PoW between its blockchains.

Put simply, Chainweb lets the different parallel chains incorporate each other’s Merkle roots. This is enabled by cross-chain cryptocurrency transfers via on-chain SPV (simple payment verification) smart contracts. Unfortunately, Chainweb doesn’t impose an upper bound on network size, but there are currently 20 parallel chains in the Kadena network.

What is the Use of KDA?

KDA is the native token of the Kadena network and can be compared to ETH on Ethereum in that it is used to pay for computations and transactions on the network.

Miners are compensated in KDA for mining blocks on the network, and users pay fees in KDA to have their transactions included in a block.

How Much KDA is In Circulation?

Kadena has a total supply of 1 billion KDA, but only 21% of that figure is currently in circulation. Part of the reason for this is that 700 million KDA has been set aside as mining rewards, with a schedule that will guarantee emissions for over 100 years.

Mining is incentivized by rewards that decrease over time. At launch in November 2019, Kadena had an emission rate of over 2 million KDA per month. This dropped in January 2021 to 1.94 million tokens per month, and in January 2025, the emission rate is predicted to be in the region of 1.69 million KDA per month.

Per this schedule, the circulating KDA supply won’t even hit 50% by 2040. However, KDA tokens were also pre-mined. A significant portion of this pre-mine is called the platform share, which is set aside for:

• Developer and economic grants falling under the Kadena technical grant program
• Community-growing initiatives like the “Community Ambassador” program
• Ecosystem initiatives like the Yel Tech Flux + Kadena node operator program
• Major ecosystem improvements

According to a blog post on Kadena tokenomics by project founder Will Martino, the platform share is unconnected to hash power and confers no governance or control over the network.

A full 200 million KDA, or 20% of the total maximum supply, makes up this platform share. A further 90 million KDA went to a strategic share and to investors and contributors.

Series A and Series B investors took over 21 million KDA. The Series A round was held in 2018, raising $2.25 million for 4.5 million KDA. On the other hand, the Series B round saw around 17 million KDA sold for $12.9 million.

Kadena also carried out a 2019 CoinList offering, selling 2.1 million KDA tokens. Employees, consultants, and advisors received 30 million KDA. 36.5 million KDA tokens, meanwhile, were allocated to a strategic share for economic incentives and possible future funding. Finally, 10 million KDA tokens were burned at launch.

How Do You Buy KDA?

Kadena is a popular and established blockchain project, so you can buy KDA from most of the top cryptocurrency exchanges. You can also look into trading for KDA on a Kadena-based decentralized exchange. Kaddex, for example, has significant KDA liquidity and bills itself as the first gas-free DEX.

Is It Possible to Buy KDA Instantly?

If you buy KDA on a Kadena-based DEX, you’ll have to wait less than half a minute for the transaction to go through. Buying KDA on a centralized exchange is even faster but may be inherently risky.

Prior to 2022, the infamous Mt. Gox collapse was one of the only examples of CEX failure. It was a tale that many failed to take seriously, as the recent collapses of FTX, Voyager, Celsius, and others have shown.

The failures of various centralized platforms due to malpractice, inadequate risk management, or outright criminal behavior point squarely to non-custodial storage being the safest answer. Best of all, with Kadena, it’s quick and easy to send KDA to the safety of your own wallet.

How Do You Store KDA?

You can store your KDA tokens in a wide variety of wallets. Kadena’s official wallet is called Chainweaver, a desktop platform that also allows you to develop applications using Pact.

If Chainweaver is too heavy for your liking, X-Wallet is a web extension wallet built natively for the Kadena ecosystem. Zelcore is a highly-rated non-custodial wallet that scores well on the privacy front, while Clover Finance is a great mobile wallet that supports KDA and other cryptocurrencies.

If hardware wallets and cold storage are more your thing, Kadena is also compatible with Ledger devices. For a full, up-to-date list of what wallets Kadena supports, visit the Kadena website’s ecosystem page and filter by “wallet.”

Kadena Energy Consumption

Kadena is a proof-of-work blockchain, which is the most energy-intensive type of blockchain network. However, Kadena’s parallel chain architecture, which shares consensus, does a good job of ensuring maximum utilization of the hash power that miners generate.

Energy consumption is an acknowledged tradeoff of PoW blockchains, but the Kadena team has several reasons for sticking with it despite the market trend of moving towards proof-of-stake. PoW is battle-tested and very secure, and it has also proven safer from a US regulatory perspective.

Is KDA a Good Investment?

Kadena’s team claims it is the only scalable PoW platform capable of scaling to settle more than 9 million trades executed on the New York Stock Exchange daily. This fact underlines the vision and scope of Kadena.

It cannot be denied that Kadena has the speed and scalability to handle this sort of usage, at least theoretically. However, the blockchain industry is awash with promising technology, and other blockchains have comparable performance characteristics.

Proponents of PoW may also look at Kadena as a viable long-term prospect for truly scalable adoption if proof-of-stake fails.

Ultimately, though, the quality of the KDA token as an appreciating asset will come down to adoption. If enough businesses choose Kadena as the platform for their blockchain-based services, then KDA will be the gas that powers this new economy.