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How Kaspa Emission Powers the Network?

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    SUMMARY

    Kaspa’s emission refers to how the new Kaspa coins are mined and circulated. Kaspa has a dedicated schedule for its emission rate, similar to Bitcoin, which has a predetermined halving schedule. However, unlike Bitcoin’s halving event, which happens every four years, Kaspa follows a gradual monthly reduction.

    The logic behind Kaspa emission is the same as Bitcoin halving, which is to prevent inflation and maintain Kaspa value. Thus, the emission schedule determines how much mining rewards are distributed to miners for validating transactions and securing the network.

    Let’s dive deep into Kaspa emissions and their impact on mining rewards and more.

    Kaspa Emission Unveiled

    Understanding the Kaspa emission is crucial to gaining insights into the dynamics of Kaspa, its supply, distribution, and monetary policy. Almost all cryptocurrencies, right from Bitcoin to Litecoin undergo halving to beat inflation by reducing its mining rewards in half. Just like Bitcoin and Litecoin, Kaspa also has a maximum supply limit.

    Kaspa is designed with a maximum cap of 28.7 billion. The fixed supply is intended to create scarcity and value maintenance. Kaspa emissions work like halving, meaning the end of Kaspa emissions stops generating new Kaspa coins.

    Once Kaspa reaches its maximum supply limit, the Kaspa network will still need miners to validate and secure transactions just like Bitcoin. Miners will be rewarded with transaction fees rather than mining rewards.

    The scope for Kaspa mining will continue to remain the same regardless of Kaspa emissions. There are speculations always when a cryptocurrency will reach the end of emissions. But Kaspa has a stable ecosystem.

    Kaspa Monetary Policy

    Kapsa monetary policy is expressed in two phases. The first phase is pre-deflationary, and the second is a chromatic phase. Let’s explore them in more detail.

    1. Pre-deflationary Phase

    The first phase is pre-deflationary, which started at the mainnet on November 7th, 2021, and concluded on May 8th, 2022. The mining rewards during the pre-deflationary phase were initially random, ranging from 1 to 1000 KAS per block for the first two weeks.

    Later, the reward was replaced with a constant rate of 500 KAS per second at the first hard form. As the block rate was also the same as 1 per second, the reward was 500 KAS per block. The first phase lasted for six months.

    2. Chromatic Phase

    After the pre-deflationary phase, Kaspa entered the chromatic phase, where the block rewards geometrically decreased over time. While the initial block reward was 440 KAS, it halves once a year. For instance, every month, the block rewards get reduced by the factor of (1/2)^(1/12).

    The ratio of block rewards from one month to the next mirrors the ratio between the frequencies of two consecutive semitones in a tempered chromatic scale. The initial block reward corresponds to the frequency of the note A4, with each averaged year referred to as an octave. In this context, a year (or octave) consists of 365.25 days, while a month (or semitone) is exactly one-twelfth of a year.

    Kaspa Emission Schedule

    Kaspa Emission Schedule

    Source: Kaspa

    Kaspa’s monetary policy declares how many coins are minted per second, irrespective of the block rate. Hence, if the block rate changes in the future, the reward will also be adjusted accordingly to maintain the same emission rate.

    Here is the precise Kaspa emission schedule miners can refer to and make informed decisions.

    ~ January 1st, 2023 — Around 15.3B Kaspa will be mined, which is approximately 53.3% of the total supply.
    ~ January 1st, 2024 — Around 21.9B Kaspa will be mined, which is approximately 76.3% of the total supply.
    ~ January 1st, 2025 — Around 25.1B Kaspa will be mined, which is approximately 87.4% of the total supply.
    ~ July 10th, 2026 — Around 95% of all Kaspa would have been mined.

    It will take approximately 36 years for the block reward to drop below 1 Sompi (the smallest divisible unit of Kaspa), effectively reducing the reward to zero, assuming the block rate remains at 1 BPS (Block per Second). However, if the block rate increases, the time required will decrease by log2 of the new BPS. For instance, if the block rate is set to 32 BPS, the time until the reward reaches zero will be shortened to 31 years from the mainnet launch, calculated as 36 — log2(32) = 36 — 5 = 31 years.

    CONCLUSION

    Kaspa is a meticulously designed framework to assure a steady and gradual emission of Kaspa. Moreover, its fixed supply, combined with a steady reduction in block rewards, ensures scarcity and inflation control. Understanding the dynamics of Kaspa emissions allows miners and investors to make informed decisions. With a defined design, innovative features, stability, and controlled emission, Kaspa is a reliable platform for businesses and individuals to leverage.

    Check out the latest Kaspa Miners

    FAQs on Kaspa Emission

    • How does Kaspa’s emission compare to other cryptocurrencies?

      Unlike Bitcoin or Litecoin, which have periodic halving events, Kaspa emissions are steady and happen gradually. Thus, they are more predictable and offer a smooth reduction in new coin issuance compared to Bitcoin.

    • Why is Kaspa’s emission model crucial?

      Kaspa’s emission model is crucial for maintaining a balanced and sustainable ecosystem. Gradually reducing the block rewards ensures miners remain incentivized in the early stages while preventing excessive Kaspa supply inflation over time.

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    Han su

    Han Su is a Technical Analyst at CryptoMinerBros, a leading provider of cryptocurrency mining hardware. He has over 5 years of experience in the cryptocurrency industry, and is an expert in mining hardware, software, and profitability analysis.

    Han is responsible for the technical analysis and research on ASIC Mining at Crypto Miner Bros. He also writes In-depth blogs on ASIC mining and cryptocurrency mining, and he has a deep understanding of the technology. His blogs are informative and engaging, and they have helped thousands of people learn about cryptocurrency mining.

    He is always looking for new ways to educate people about cryptocurrency, and he is excited to see how the technology continues to develop in the years to come.

    In his spare time, Han enjoys hiking, camping, and spending time with his family. He is also an avid reader, and he loves to learn about new things.

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