What is Kadena (KDA)?
Kadena is a public blockchain that aims to optimize for scalability and features a new smart contract language, dubbed Pact, which comes equipped with formal verification and upgradeable smart contracts. Kadena also uses a new Proof-of-Work (PoW) consensus mechanism called Chainweb that consists of multiple individually mined chains working in parallel to execute network transactions. This design theoretically supports a high-transaction throughput at the base-layer without the need for any second-layer scalability or functionality solutions.
KDA is a digital currency that is used to pay for computing on the Kadena public chain. Similar to ETH on Ethereum, KDA on Kadena is the manner by which miners are compensated for mining blocks on the network and is the transaction fee that users pay in order to have their transactions included in a block.
Why Kadena (KDA) Unique?
Kadena offers a public proof-of-work blockchain with high throughput by combining two separate consensus mechanisms: DAG and proof-of-work.
In simple terms, Kadena achieves this by braiding chains together, meaning it offers not one but several (20) separate blockchains that all work simultaneously and asynchronously to validate transactions. This allows Kadena to mint multiple blocks simultaneously, thus increasing its throughput. This also increases security by reducing an attacker's time between block confirmations.
Kadena uses a directed acyclic graph structure to scale from one proof-of-work blockchain to theoretically an unlimited amount. However, its DAG structure is fixed and multi-channel, meaning Kadena's blockchains only communicate with three peer chains instead of randomly confirming transactions. This improves real-world performance and scalability.
Kadena can scale as required by the needs of its users. However, the main limitation is adoption, as scaling and adding additional blockchains require the network to undergo a hard fork. In theory, Kadena can scale to 50 or 100 blockchains or even more if it demonstrates continued adoption. The process is not automatic though: once the network becomes congested, fees rise and miners forming a DAO are incentivized to cooperate in reconfiguring the network to a larger size.
Kadena's native smart contract language, Pact, is designed to improve upon common flaws observed in Ethereum's Solidity, particularly its susceptibility to unbounded loops and lack of Formal Verification. Pact smart contracts can also be upgraded at any time without requiring a hard fork.
Kadena also built a private blockchain that predates its public smart contract platform. The private blockchain, now called Kadena Kuro (formerly ScalableBFT), uses a Byzantine Fault Tolerant (BFT) consensus mechanism and is optimized for enterprise-grade use cases. Since 2018, Kadena Kuro has been used by a healthcare consortium to help reduce the effort required to collect and maintain insurance provider information. This private blockchain can be used similar to a side-chain with a public blockchain network (such as Kadena's public platform) to speed up transaction processes and create new marketplaces for data.
The project was founded by former members of the JPMorgan blockchain development team for Juno. Kadena has raised $15 million to date, with the majority of those funds secured in the form of SAFTs (Simple Agreement for Future Tokens). Not included in this total is the $150,000 grant Kadena received from the Interchain Foundation (the development team behind the Cosmos network) to build a version of Pact that is compatible with the Tendermint protocol.