One of the improvement proposals would lead this network to process up to 10 blocks per second.
In January 2024, mining with KAS ASICs was generating almost $100 a day in profits.
Currently, and for several months, Kaspa (KAS) mining has been going through times of lower profitability compared to other crypto assets such as Bitcoin (BTC) and Dogecoin (DOGE).
While the ASIC (application specific integrated circuits) that generates the most income in KAS offers daily net returns of around $3.35, DOGE and BTC mining average daily net returns of 42 dollars and 22 dollarsrespectively, according to Whattomine.
In this context, the Kaspa community and developers are working on implementing technical improvements in this network that could lead to greater scalability and usability, which could ultimately drive the adoption of KAS and its mining.
What are the possible implementations in Kaspa in 2025?
Consensus protocol update
The Kaspa network uses a consensus mechanism based on Proof of Work (Proof of Work, PoW), but with a structure called blockDAG (Directed Acyclic Graph or in Spanish “Directed Acyclic Network of Blocks”). This approach aims to simultaneous processing of multiple blockswhich would improve the speed and scalability of transactions.
Within that structure, the specific protocol that Kaspa uses is called GhostDAG (GD) and works to integrate orphan blocks, aiming to maintain network security and quick confirmations of transactions.
The Kaspa improvement proposal, called KIP-02, intends to modify that GhostDAG protocol and implement the DAGKNIGHT (DK).
According to the Kaspa developments site, the motivation for this change would be that DK “is 50% tolerant to Byzantine errors, so it is faster and more secure than GD.”
The DAGKNIGHT protocol is based on the Nakamoto Consensus (NC), used in Bitcoin, but extends it towards a Directed Acyclic Graph (DAG).
In simple terms, a “graph” is a data structure that consists of nodes (in this case, blocks) connected by edges (transactions or links). A DAG, for its part, is a type of graph where the connections do not form cycles, that is, you cannot return to the starting point by following the edges.
DK, according to its repository, does not require fixed parameters to adapt to network latency. Instead of adding blocks in a linear chain (as happens in Bitcoin every 10 minutes), DK allows multiple blocks to be created and referenced to each other simultaneously, which would lead to an increase in the connectivity and robustness of the system.
This approach would improve the scalability of the network, allowing for higher transaction throughput, as well as making any attempt to reorganize the chain to reverse transactions more difficult and costly.
Its design without predefined parameters would make it more flexible and resistant to attacks that depend on manipulation of block confirmation time.
Ultimately, it is important to note that this KIP-02 is still in the development stage.
Increase block production to 10 per second
Already in the stage of testnet, on a test network called TN11, Kaspa is preparing a significant update called “Crescendo – Hard Fork at 10 BPS”.
This improvement, announced in August 2024, seeks to increase the block production rate from 1 to 10 blocks per second. The goal is to improve the scalability and efficiency of the network.
According to the documents from Kaspa, through the TN11, the developers have confirmed that reached the desired block production rate (10 BPS) and have solved problems, such as identifying “bottlenecks” that congest the network.
However, the implementation of hard fork (hard update) It is scheduled for the first quarter of 2025 given that there are still several tests left for it to be activated on the main network, as seen in the Crescendo roadmap.
Thus, “Cresecendo” could allow Kaspa to handle a much higher volume of transactions per second. Currently, this network processes a block every 1 or 2 seconds and these contain between 1 and up to 7 transactions included, while CriptoNoticias reviewed its block explorer.
However, these large updates can introduce volatility in the price of the cryptocurrency due to the speculation and uncertainty surrounding these events.
In addition, the documents clarify that this update will not affect user funds or the issuance of Kaspa. Although the total rewards will increase due to the higher block rate, the block reward will be adjusted proportionally to maintain the issuance rate.
Introduction of smart contracts
Although this proposal is still in the “planning” stage and does not have a certain completion date, according to the Kaspa site, the goal in the future is for this network to be able to support smart contracts to implement decentralized finance (DeFi), dApps and new use cases.
Since May 2023, there has been talk of two possible paths– Implement native smart contracts on Kaspa or use an Ethereum (ETH) L2 layer for this functionality.
In this sense, part of the Kaspa community has given its “approval” regarding this implementation, promoting a enthusiastic feeling for this initiative, although it is still being discussed which of the two paths to choose.
The concrete thing is that, in December 2024, the Kaspa network introduced KRC20a standard of token similar to Ethereum’s ERC20, allowing the creation of tokens on the Kaspa networkwhich is a preliminary step towards a more complex smart contract infrastructure.
Although KRC20 are not smart contracts in themselves, they would be facilitating experimentation and development within the Kaspa network.
Given these possible reforms in this network, Kaspa could increase your efficiency and expand your use casesparticularly with the integration of smart contracts.
Thus, these updates could attract more users, which would boost demand for the token KAS.
Therefore, if the KAS price were to increase, it would offer higher profitability in your miningwhich in the past caught the attention of many miners, when in January 2024 it generated income of up to $100 a day with ASIC.