Cipholio Research | A Strong Competitor for Monolithic Chains: Kadena Network
Author: @0x_Jonas from Cipholio Ventures
TLDR
- Kadena, a traditional public chain project, combines Chainweb and Pact, enabling unlimited transaction throughput and secure smart contracts.
- Despite a smaller ecosystem and competition compared to Ethereum and other blockchains, Kadena’s Pact and limitless scalability may provide a market edge.
- Kadena addresses traditional blockchain challenges with its high throughput blockchain and secure smart contract language. Its upcoming developments will contribute to Kadena’s growth and evolution.
I. Introduction
When it comes to monolithic blockchain, the first thing that may come to mind is Bitcoin or Solana, which owes its rapid development quickly to the strong support of numerous capital and FTX for its DeFi ecosystem. However, after the FTX collapse, Solana also fell apart. The development of single-chain blockchain ecology led by SUI/Aptos is still in its early stages, and it seems unable to take over the narrative of single-chain blockchain. In this article, we will analyze Kadena, a traditional public chain project whose mainnet has been live for three years, and take this opportunity to explore why Kadena exists as a competitive player in the high-speed chain industry.
II. Comparison
The key feature of Kadena is its combination of their smart contract language, Pact, and the braided-chain Proof-of-Work architecture Chainweb. These technologies allow for high transaction throughput, safe and simple smart contract construction. This provides a trustworthy ecosystem for distributed applications, safely shared business workflows, and flexible governance mechanisms for the modern age.
- Consensus Mechanism: The consensus mechanism validates and authenticates blockchain transactions, ensuring their legitimacy and maintaining a full record. Different blockchains use various consensus mechanisms, such as proof-of-work and proof-of-stake, which are employed by Ethereum/Aptos and Cardano, respectively, to achieve specific goals.
- Transaction Speed: Blockchain efficiency is closely tied to transaction speed. Ethereum currently experiences congestion, resulting in confirmation times of up to 12 seconds, depending on fees. Meanwhile, Kadena takes less than 2 seconds to validate a transaction. Transaction finality is a better measure of transaction speed than TPS, as the latter can vary depending on the time it takes for the transaction to be validated.
- Scalability: Scalability refers to a network’s ability to process many transactions without causing congestion or delays. Currently, Kadena is proving to be the most scalable blockchain, handling practically infinite0 throughput with low fees and little to no delays. With every scale of KDA, blocktime reduces. For example, at 20-chains, blocktime drops to 1.5 sec per block. To achieve super-short blocktimes, a layer-1 blockchain must have a tractable path to scaling (e.g. a 1000-chain KDA would have a cross-network block time of 0.03 sec). This is why we talk so much about “blocks produced” — it clearly indicates that this thing is different and can scale.
Blockchains offer innovative technologies that prioritize high security and transparency for users. Validation mechanisms provide benefits for both users and developers. Kadena’s highly scalable network provides real-world solutions, Aptos’s blockchain is efficient for long-term investment, and Ethereum’s smart contracts have brought both pleasure and pain to the congested network and its users, each with unique benefits.
III. Key Features
Along with its scalable layer-1 blockchain, Kadena offers a smart and secure smart contract language, Pact, for developers to turn their ideas into code. Pact helps distinguishes Kadena from other ecosystems as Pact was built with safety first in mind with features such as human-readability, which allows non-developers to read smart contract code on-chain.
Unlike other languages like Solidity on Ethereum, Pact is Turing-incomplete which provides developers with the restrictions needed to prevent actions like infinite recursions. Being Turing-complete, languages like Solidity increase their likelihood of bugs and exploits with no additional benefits. Furthermore, Pact’s built-in Formal Verification allows developers to check for any bugs and potential hacks within their code in real time. Given the growing number of hacks and exploits that have plagued the crypto ecosystem over the past year, Kadena’s unique smart contract language positions them as a strong competitor in the blockchain space. The Pact language has the potential to prevent such incidents from occurring (https://savedby.kadena.network/), making Kadena a promising player in the market.
https://medium.com/kadena-io/why-pact-is-the-best-defi-language-530ed629008
IV. Tokenomics
Kadena’s KDA token is used for transactions and mining. Mining KDA contributes to network security and rewards users with KDA tokens. Nearly 20% of the one billion KDA tokens have been generated and are in circulation, about 171 million KDA.
The Kadena ICO took place in 2019, with the distribution of tokens as follows: 70% are allocated for miners, 20% are reserved for the project to support network stabilization, 7% are assigned to initial investors, and the remaining 3% are shared among the team members.
V. Risks and Opportunities
The reason for the poor performance in recent years is that there are fewer applications developed in the Kadena network compared to other ecosystems.
According to DeFi Llama, the network has only five live DeFi apps: eckoDAO, KDSwap, Babena, Anedak, and KDLaunch. They have a total value of locked tokens (Total Value Locked) of $2 million. Eckodao dominates with 77.8%
Kadena has some tough competition, with Ethereum being its biggest rival. Although Ethereum’s blockchain is powerful, it has relatively long processing times, making it less efficient. Second-layer solutions like Polygon aim to address this issue, and Ethereum’s anticipated migration to the Proof of Stake algorithm should help boost its speed considerably. Moreover, Kadena needs to distinguish itself from a multitude of Ethereum competitors.
Kadena’s ambitious 120-year mining reward release program raises questions about whether it can achieve everything outlined in its roadmap. This long-term approach may appeal to enterprises seeking blockchain benefits without volatility, but it could deter younger startups seeking platforms with a broader network effect.
Although Kadena has partnered with prominent market networks and plans to introduce cross-chain transfers, the effectiveness of enabling developers to port their dApps without code rewriting remains uncertain.
However, Kadena has significant potential for success, particularly Kadena’s unique offering of Pact, a human-readable programming language with features that safeguards against hacks and exploits gives it an edge in the market. Additionally, the ability to eliminate transaction fees for customers of businesses built on Kadena is a considerable advantage over other enterprise-focused blockchains.
VI. Conclusion
Kadena solves many of the challenges that traditional blockchains face. Its most significant advantage is its smart contract Pact, a crucial feature for various sectors and industries that are prone to hacks and exploits. Upcoming developments on the project’s roadmap could further contribute to the positive growth and evolution of Kadena.
Reference
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