Kusama: A Lightweight Version of Polkadot

If you never thought a testnet would accrue significant value, you’d be wrong.

Litecoin still boasts a near $4 billion valuation.

Jokes aside, Polkadot’s “wild cousin” Kusama has quickly ascended into similar territory. What was once billed as a wholly experimental, unaudited trial network meant to serve as a sandbox for Polkadot developers is now almost a $300 million network. Kusama has gained two-thirds of this value just within the last week.

Most sane investors might find this irrational, even by crypto standards. We were less than enthused with Kusama as an investment vehicle early on because its original purpose was for developers to break it. And earlier this year, break it they did. But somehow, none of that has deterred the network’s growth.

So is Kusama’s run just a by-product of this DeFi-ignited bull market? While it certainly played a role, there might be more than meets the eye.

What gives a blockchain value?

Kusama has a clear value proposition as a future claim on DOTs. Early on, the Web3 Foundation said it would allocate 1% of the initial DOT supply to “Kusama’s stakeholders and community.” According to the team, the foundation will accomplish this exchange by bridging Kusama and Polkadot and sending the full amount (10 million DOT) to Kusama's on-chain treasury once the infrastructure is in place. It will then be up to Kusama's on-chain governance to determine the distribution process.