Public vs Private Blockchains & Scalability -- Kadena (KDA)
Kadena was founded by Will Martino, and co-founder Stuart Popejoy in 2016. Will Martino previously served as Lead Engineer for Juno (JPMorgan’s Blockchain prototype) and was also Tech Lead for the SEC’s Cryptocurrency Steering Committee and Qualitative Analytics Unit. Stuart Popejoy previously led JPMorgan’s Emerging Blockchain group and has 15 years of experience building trading systems and exchange backbones for the financial industry.
Kadena was founded on the idea that blockchain could revolutionize how the world interacts and transacts. But to get to mass adoption, chain technology and the ecosystem connecting it to the business world needed to be reimagined from the ground up. Kadena founders built a proprietary chain architecture and created the tools to make blockchain work for business – at speed, scale, and energy efficiency previously thought unachievable.
The purpose of Kadena is to be a single source of the resources needed to build blockchain applications. In doing so, Kadena solves many of the problems that have impeded widespread blockchain adoption to date including scalability, security, and ease of use.
The public blockchain is a Proof of Work protocol that has solved layer-1 scalability. This is achieved by braiding together several Bitcoin-like chains. As transaction volume increases, the network can expand to larger configurations (eg. from 10 chains to 20 chains) and deliver higher throughput capacity.
The smart contract language, Pact, is Turing Incomplete and offers Formal Verification. Turing Incompleteness reduces the language’s attack surface without compromising domain-specific functionality. Formal Verification allows smart contract authors to mathematically prove that their code does not contain bugs.
3. Ease of Use
Kadena was developed in part to be integrated into traditional business workflows and understood by non-technical users. Accordingly, Pact code is executed directly on the ledger and is stored in a human-readable format. Pact code has error messages and Pact contracts are upgradable allowing developers to fix errors or adapt logic as business needs evolve. Kadena is among the first blockchain projects to deliver such a comprehensive feature set.
Further, users are able to enjoy these features across Kadena’s hybrid blockchain platform, a public-private interoperable network. This hybrid solution allows users to take advantage of the benefits from both public and private blockchains without compromise, thus enabling use cases that were previously not possible.
Kadena has 3 main components:
1. Private blockchain called Kuro
A private blockchain, sometimes known as a “permission” blockchain or an enterprise blockchain, is a distributed ledger where only invited users can join and access the ledger data within the network. This differs from public blockchains like Bitcoin, Ethereum, or Kadena’s public blockchain, where anyone can join a public, decentralized network and contribute to the ledger. Both types of blockchain provide a means of recording and replicating an immutable, cryptographically secure ledger. On private blockchains, this is performed through consensus mechanisms like voting; on public blockchains, this is performed through various consensus mechanisms including mining.
Private blockchains are advantageous when you want to get the benefits of blockchain — instantaneous, perfect replication, effortless administration, upgrades without service interruption, and ease of growing the network — but only want approved users to participate in accessing or sharing the sensitive data.
2. Public blockchain called Chainweb
Chain web is a braided, parallelized proof-of-work consensus mechanism that improves throughput and scalability while maintaining the security and integrity found in Bitcoin.
Kadena uses proof of work for a few key reasons:
Evidence: Proof of Work is the only “battle-tested” consensus protocol primitive.
Economic incentive alignment: Proof of Work creates an economic incentive for the majority of the hash power to validate and honestly support the entire network. It is an open research question if a non-Proof of Work approach can reasonably achieve the same.
Regulation: In the eyes of certain financial regulators, proof of work miners are not considered money transmitters, making a probabilistic Proof of Work mining system safer from a US regulatory perspective than a system with more “finality” like PoS.
3. Kadena's smart contract language called Pack
Pact is a human-readable and Turing Incomplete smart contract language purpose-built for blockchains with powerful security features including full Formal Verification of user code, error messages, contract upgradability, support for interoperability, and strong permission and access control. Anyone can write this language on the blockchain in an understandable, direct, and secure way. This means real progress for secure and automated contracts.
Pact is designed to be a smart contract language that people can easily learn and use to support sophisticated/advanced projects. Kadena’s high-performance and secure enterprise solutions are available to teams of all sizes and experience levels and easily connect with existing systems.
Kadena provides solutions to the problems faced by Ethereum. Additionally, “Official Verification” that other blockchain applications have added to their new roadmap already offers interoperability, scalability, and more. Located on the Kadena platform, KDA is a token paid by miners for their mining activity on the network and is the transaction fee users pay to include their transactions in a block. Besides, KDA will be used to implement smart contracts.
At the end of September 2020, Kadena launched its own decentralized exchange or dex called Kadenaswap.
Kadenaswap is a decentralized exchange (DEX) running on the Kadena blockchain, modelled after Uniswap and other “constant product” exchanges. Like those, “automated market makers” (AMMs) provide liquidity for pairs of tokens, so that users may swap one token for another at the ratio currently provided by the pair.
The great thing about this design is how it lives up to the “decentralized” claim: everything from liquidity provision, pricing to swapping is done entirely on-chain, requires no intervention from off-chain authorities or oracles, and is fully autonomous with no control by any central on-chain authority either.
Kadenaswap is designed to take the constant product design that has proven so successful with Uniswap and other DEXs and leverage the unique advantages of the Kadena platform.
First, as an on-chain DEX, Kadenaswap will be multi-protocol from the start, offering any on-chain asset that market-makers want to pool. Unlike many “off-Ethereum’’ DEXes, Kadenaswap pairs are not limited to only super-liquid tokens like BTC and ETH and leading stablecoins, but any fungible asset on-chain, such as protocols that provide unique market access like LUNA and CELO, as well as proven protocols on Ethereum like DAI, and of course all tokens on the Kadena platform.
Thanks to gas stations, trading on Kadenaswap won’t require a user to hold KDA to trade. Even if they did have to pay gas, gas fees on Kadena are currently microscopic (usually ~0.0000000001 KDA). However, this can change if usage steeply increases. If only running on one chain of the Kadena blockchain, gas prices would inevitably go up for the same reason they do on Ethereum: in the face of congestion, increasing the gas price increases the priority for a miner to include your transaction in the next block.
The real answer to gas prices is scalability. This is where Kadena shines: even the fastest Proof-of-Stake platform has upper limits on throughput, but Kadena’s chain web protocol uniquely can scale the number of chains to meet any demand. In turn, Dapps on Kadena simply scale out to the number of chains needed to service demand.
So, just run Kadenaswap on multiple chains, problem solved? Well, not exactly. Chains in Kadena still run independently, and a coin “can’t be in two places at the same time”. Each Kadenaswap smart contract on its own chain will have completely separate pools for a given pair. This can mean prices can get out of sync, but that can be fixed by the same arb-ing described above. The harder problem to solve is liquidity fragmentation, where a pair on one chain has way more inventory (and is, therefore, a better place to trade) than on another chain.
The great thing about Kadena’s multi-chain structure is that it’s truly multi-chain while still being in the Kadena universe: once it’s in motion, the multi-venue design can then scale onto other Pact-supporting platforms like Cosmos, or Polkadot (once the Pact Core/Kadenadot initiatives are ready).
In this way, Kadenaswap will be the only multi-venue, multi-protocol, and multi-platform DEX, leading to a future where users won’t have to even think about platforms and protocols, but just access value wherever it is.
Kadena can be purchased at several big exchanges such as:
1. Binance you can purchase Kadena (KDA) using your mobile phone or desktop. You only need to follow the step as instructed. You can also receive a 25% discount on trading fees using BNB. Use the link above for a bonus 10% discount.
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