Crypto Research

Kadena (KDA)

Mar 15, 2022

Kadena was founded by a couple of JP Morgan experts. The experts offer a wealth of experience and knowledge in finance and blockchain. Kadena has a lot of potential if it does what it promises.

The project was created based on the concept that blockchain technology can transform the way people around the world communicate and do business. Trying to follow in Bitcoin's footsteps and using proof-of-work as consensus, Kadena has claimed to be able to solve the infamous blockchain trilemma (scalability, security, and decentralization).

Kadena's blockchain is not the same model as Bitcoin's blockchain, as Kadena braids together multiple different chains that work in parallel to execute transactions. Their model is called Chainweb and their approach is a form of sharding. To simplify this concept, let's take a look at Bitcoin. Bitcoin uses a single chain. As each new block is mined, it is associated with the hash — a long string of characters from the previous block — in the chain. To create a new chain, miners around the world strive to find the solution to the math problem and thus generate the correct hash for the current block. The miner who completes this, wins the right to add the blockchain and gets the reward for their solution.

Now imagine we start with multiple chains instead of a single chain. Each time a new block is mined, it not only connects to the previous block in its chain, but also to the previous block in its pure chain. Unfortunately, this model is not scalable and secure. This is where Kadena comes in. Hash brading allows Kadena to perform trustless cross-chain transfers yielding a single currency across multiple chain.

For a 10-chain structure, Kadena uses the Peterson graph, which means each chain only needs to communicate with three of its peer chains, instead of all nine, since each node has three edges. This diagram was used when Kadena was launched.

On August 20, 2020, the Kadena network forked from 10 chains to 20 chains.

Kadena further develops their chain-linking abilities using fixed graph theory - a unique approach that allows them to scale a previously non-scalable model. Kadena claims that their architecture has no upper limit on how many transactions per second it can support. They have also developed their own native smart contract language called PACT. PACT aims to improve Solidity's shortcomings and make it much easier to write smart contracts on Kadena.

Besides their public blockchain, they also have a private blockchain called Kuro. Kuro is primarily intended for enterprise use cases, but it can also be integrated into the public network as a sidechain. Finally, they have a native token called KDA that is used to pay for gas on their network.

The big headline is the speed that Kadena claims to have thanks to the use of so-called braided chains. Kadena developers believe it can process 480,000 transactions per second (TPS). But that's just theory so far. Now bear in mind that Solana is considered to have one of the fastest blockchains around and it claims between 50’000 and 60’000 TPS.

Kadena has a lot of potential if it does what it promises.