TL;DR: Cryptocurrency is a life changing opportunity for many people that get in early and know what they’re doing. It’s happening with KDA and it will happen with other blockchains and tokens as well. 

It’s safe to say the crypto industry is still in its infancy with gigantic room left to grow. Kadena crypto tokens might be quite a good investment, but you have to know how to asses the status of the Kadena network and its future value.

In this article, we’re gonna learn how to judge the economics of a blockchain such as Kadena and draw a conclusion based on it.

Should you buy Kadena (KDA)?

With a total predicted market cap of $15 trillion by 2025, crypto investing is clearly on the rise. Over the past few years the crypto industry has maturated from “magic internet money” into fully fledged companies that are on their way to become major financial institutions.

From the 40 year old Bitcoin maxi to the 15 year old who flips JPEGs as a side hustle, putting some money in novel technologies such as cryptocurrencies is now a trending activity for investors of all ages. The new generation didn’t get their shot at investing in the tech giants of today, and crypto is seen as the next big technological revolution.

Why is that you ask? To put it short, traditional assets have reached their explosive peak. Digital assets such as tokens, coins, and NFTs are a new financial instrument that you can use to better diversify your investing portfolio.

Tired of small returns people are shifting their attention to more compelling assets — but that also comes with several downsides. Navigating these downsides and preparing yourself for what to expect when buying tokens is a crucial part of investing. Knowing all the intricacies is not always necessary but some knowledge is required to not blow up your account by investing in crypto.

Kadena is a cryptocurrency and as any other cryptocurrency, it’s prone to volatility. After seeing the performance of the Kadena chain it’s understandable to ask yourself if KDA is a good buy right now.

Buying its native KDA token is one of the possible ways of making money on Kadena, but is it worth it? What does $KDA do and is Kadena the future? 

A clear answer to these 2 questions is needed before allocating a part of your portfolio to $KDA.

Launched in 2016, Kadena is led by pioneers in the blockchain industry. Its founders built JPMorgan’s blockchain and one of Kadena’s key members worked for the SEC’s Cryptocurrency Steering Committee.

Kadena’s biggest strength is its scalability. This is achieved through its smart contract language Pact and the use of upgradeable smart contracts. The network is built to exist solely as a layer-1 blockchain with all functionalities incorporated at the base layer.

The team claims Kadena can scale indefinitely as internal tests show there is no bound to the number of transactions it can process per second. If the team can replicate the same results in the mainnet then Kadena can be a serious competitor to giants like Ethereum.

Why does Kadena (KDA) have value?

The KDA token is named as “the common unit of account” of the Kadena ecosystem.

In simple terms, KDA is the native token for the Kadena blockchain. It is used throughout the network for different use cases.

Kadena is the network (also called blockchain), and the $KDA token is the fuel that powers it. Every interaction on the Kadena network requires users to pay a small fee, called gas fee. The gas fee is paid to miners in exchange for securing the chain.

Having no fees or a fee that is too low opens up the network to attacks and spam transactions. Blockchains work on the premise that attacks should be very expensive. If the fee is cheap attackers can spam transactions and clog the network. This is the case we’ve seen with blockchains such as Solana.

In the instance of Kadena, both miners and users interact with its native KDA token. Both of these network members (or “actors”) use $KDA for different purposes. This creates an economic structure that is healthy for the future of the KDA token.

Miners need to spin up mining rigs and consume electricity to confirm transactions and produce new blocks. This electricity is converted into raw processing power needed to produce blocks. In return they receive freshly minted Kadena tokens as the block reward.

Such a rule is implemented so that attacking the network becomes very expensive to malicious actors. Take Bitcoin for example, if you wanted to try and include one malicious transaction in just a single block it would cost you upwards of $1 Million in electricity costs. Being stable and immutable at all times are the primary scopes of a blockchain, everything else comes second. 

If a miner tries to include a bad transaction in a block then the rest of the miners will ignore it. A new network will be temporarily created by the malicious miner (called fork) then die soon after, and the miner will be left on its own separate network. This is the rule of PoW blockchains — the longest chain is the valid one — and all mining nodes follow the longest chain.

The longest chain is what individual nodes accept as the valid version of the blockchain. It’s the chain of blocks that took the most effort to build. What effort are we referring to exactly?

In short, to add a new block to the chain you need to use processing power, which means that every block on the blockchain used up energy to get there. As a result, nodes will always adopt the chain that took the most energy to build, which is what we mean when we refer to the “longest chain”. This is Satoshi Nakamoto’s guiding principle that all Proof of Work blockchains follow inside their protocol.

Using the Kadena blockchain also requires some KDA, regardless of the type of transaction being sent. Users pay a small fee in KDA to miners for verifying and including their transaction in a block.

Kadena’s Blake consensus algorithm requires KDA tokens to be used as a measure for preventing bad behavior, without it users cannot make transactions. With this in mind we can conclude that the main use case of the $KDA token is securing the Kadena blockchain. 

Can the usage of the network affect the price of Kadena (KDA) tokens? As more people join the network and use tools that are integrated with Kadena it impacts the dollar amount that new buyers will have to pay when buying KDA coins. 

If more users join the network, that puts economic pressure on the supply of the $KDA token. A bigger number of people will need to buy KDA tokens — making the price of Kadena go up as more people use the chain and the integrations on it. This also has an effect on the actors that confirm the transactions users send to the network. More people means more transactions, and more transactions means more fees. 

This correlation between network usage and the value of the native token is a natural occurrence in Proof of Work blockchains such as Kadena. It is also what gives the KDA token its primary monetary value. How high that value can be is detailed in the next sections.

Why is Kadena (KDA) going up/down?

Kadena, like any other cryptocurrency is volatile by nature. When you see the price suddenly go up or down, it’s normal to ask yourself why that happens. 

The price of a cryptocurrency is influenced by many factors like supply, usage, emission and market sentiment. Due to its tokenomics, new Kadena tokens are being released with each block. Because tokens are being released over time this results in selling pressure from miners. 

But that does not mean it can’t go up or down in price based on how much the Kadena blockchain is used. Adoption is usually the key metric that influences the price of a token.

A negative event such as delays in upgrades or lack of traction can have broader implications for investors and result in the token price going down.

Positive events such as the release of Kadena Kuro or partnerships such as Kadena launching its marketplace on AWS gives confidence to investors in the long run. Events such as these means more people hear about Kadena and may become interested in owning some $KDA..

This brings more users to the Kadena ecosystem and usually has a positive impact on the price, making it go up. Other parts of the Kadena tokenomics can also influence the price, let’s see what those are.

A portion of a token’s supply is usually locked at launch, with the rest being slowly released in time. This can mean months, years or even decades — so it’s important to know the specific timeline of the chain you’re investing in. Such releases are mentioned in official documents such the Kadena whitepaper.

Constant block rewards and miners selling their newly minted tokens can put selling pressure on the token. This can make $KDA — the fuel of the Kadena chain — go down in price temporarily. 

However, as long as usage continues to grow that shouldn’t have too much of an impact in the long-term. The price of a coin is a complex number that stands on top of many pillars that are constantly changing. 

Blockchains are resilient by design and have a couple of measures implemented at the protocol level to combat possible issues. This ensures the Kadena network can still function or in the worst case come back online at a later time, unaffected. Unless a catastrophic event occurs it’s impossible to pinpoint the price movement to one single cause.

Can KDA reach $10 per token?

Buying and hodling KDA — the native token of the Kadena chain — is one way of potentially making money on Kadena.

By looking at its current price, it’s natural to think about the chance of KDA hitting $10 per token. This can happen sooner, or way in the future, and is determined by a couple of ever changing factors.

Let’s examine the potential growth of the KDA token by analyzing its tokenomics. Kadena’s current market cap sits comfortably at ${MARKET_CAP}. With {CIRCULATING_SUPPLY} Kadena tokens being in circulation today, that means a price of {PRICE} per KDA.

How did we come to that calculation? It’s quite easy, the price of a Kadena token is equal to its current market cap divided by the number of tokens in circulation. Dividing ${MARKET_CAP} by {CIRCULATING_SUPPLY} gives us a result of {PRICE} for each KDA coin. 

By changing the order in the simple formula above we can use it to calculate other things as well. This helps us a lot because we can deduce the market cap of Kadena at different token prices. Then, we can use the result to compare it to the current state of the network and see what would be required for Kadena to hit that price.

At a price of $10 per token, that means the current market cap of Kadena would equal ${{CIRCULATING_SUPPLY} * 10}. Remember that we arrived at this number by multiplying the amount of circulating tokens by $10.

Now let’s shift our attention to the fully diluted market cap.

Some blockchains may have their tokenomics built in a way that only a small percentage of tokens are circulating at the beginning. This can be misleading because we don’t have the full picture and only take into account the current number of coins released in the market.

The fully diluted market cap represents the total value of a coin if all tokens were in circulation. Kadena’s whole supply of tokens is {MAX_SUPPLY - TOTAL_SUPPLY + CIRCULATING_SUPPLY} KDA which means that no more coins above that number will ever be created.

These tokens are not created at the discretion of a specific entity. They are created automatically by the network to reward different actors that keep it secure.

How does this impact the price of Kadena? Taking into account the current price of a KDA token, that would result in a fully diluted market cap of ${MAX_SUPPLY - TOTAL_SUPPLY + CIRCULATING_SUPPLY * PRICE}. KDA coins that have been burned are not taken into consideration because they have been permanently removed from circulation.

Whether it seems gigantic or not, the number we came to above only takes into account the current price of a KDA token. Doing the same calculation but with a price of $10 gives us a result of ${{MAX_SUPPLY - TOTAL_SUPPLY + CIRCULATING_SUPPLY} * 10} for the Kadena network fully diluted market cap.

These are all crucial details to know when calculating if Kadena can reach the price of $10 per token. If the diluted market capitalization is way too high, the token has little room left to grow. Blockchains in general have no cap on the value they can reach, whether that number seems possible it’s totally up to you.

The future of Kadena depends solely on its growth as a network used by tens and hundreds of millions of users.

If you’re looking to add some Kadena (KDA) to your portfolio, the most trusted places to get some are Binance and Coinbase.

Can KDA reach $100 per token?

Let’s get to bigger feats now, a price of $100 per KDA token. If $10 got your attention, one hundred bucks for a single token definitely made you interested about buying some, but is that even possible?

As noted before, we should refer to the total market cap when thinking about the possibility of Kadena reaching a certain price. The fully diluted capitalization formula is a simple and fast way of assessing the future growth of chains such as Kadena (KDA). 

At a price of $100 per KDA, that results in Kadena being worth ${{MAX_SUPPLY - TOTAL_SUPPLY + CIRCULATING_SUPPLY} * 100}. If that number seems high to you, well.. that’s because it is. Such valuation would make the entire Kadena chain one of the most valuable networks in the world.

While usually reliable, the fully diluted marketcap formula has one small caveat that usually gets overlooked. This small detail might make all the difference in the world when thinking about investing in Kadena.

The issue with such a simple calculation is that it doesn’t take into account the specifics of each chain. We are not talking about the features of the underlying technology, but rather the future events that might impact it. If the fully diluted market cap is too high it increases the efforts needed for the network to sustain such a price. 

Outliers have been observed, and it’s definitely possible for a cryptocurrency to reach a mind boggling capitalization. The most clear examples of that are giants such as Bitcoin and Ethereum. 

Being the one of the most valuable assets in the world, they have already broken the monetary barriers that a blockchain network can reach. But how did they do it? The answer is pretty simple, but doing it is quite the opposite.

The future growth of the token price is usually tied to the growth of the underlying chain that it powers. Constant updates, sustained development and users joining the platform are notable factors to take into account. 

If the founding team continue to deploy updates that make Kadena competitive it will result in numerous interested developers building on it. Developers will be incentivized to build revolutionary integrations on Kadena and amass new participants to the network.

Whether sooner or later, this will be clearly reflected in the KDA price. Users will come in and put buying pressure on the KDA token, raising the price in return.

So, while a price of $100 is theoretically possible — and maybe even more than that — the future growth depends on relevant updates that increase the actual usage of the Kadena chain.

What a network does and the way it grows directly affects your investment in it. It is rare that you can buy a coin and then forget about it for months or years. 

If staying up to date with the events in the Kadena ecosystem is important to you then make sure to follow the latest $KDA news that come out.

Is Kadena (KDA) dead?

If the price of a coin has stagnated for a long time, it’s healthy to ask yourself if the project has indeed died. Price, however, is not the only factor that should lead you to this assessment. 

There are many other parts in the lifecycle of a blockchain that have to function properly for it to keep growing. Another important factor is the activity of the Kadena development team.

If the development team, or Kadena developers in general, have signaled the abandonment of the network that’s a bad sign for the Kadena ecosystem. Lower development activity on the Kadena network means fewer tools and integrations being built.

A blockchain such as Kadena gets its users from the number of integrations and updates released for it. They’re the primary motive to use a Proof of Work network such as Kadena, without tools there’s no incentive to use it.

The fewer tools are available, the less users want to use the Kadena blockchain for their transactions. When more integrations get released, new use cases become available and more users join the Kadena (KDA) ecosystem. 

Currently, the Kadena (KDA) blockchain is thriving both in usage and development activity. This translates into a healthy ecosystem and new participants that join the network periodically. 

With increased usage of the network comes more fees to miners, which are incentivized to spin up more mining rigs and further decentralize the network. This cycle needs to always function smoothly to keep Kadena and its ecosystem alive. To asses the current status and future of a network we need to take a look at the latest updates and plans.

The biggest updates on the Kadena (KDA) chain are the release of Kadena Kuro and Kadena Eco.

More updates are also prepared for Kadena, with the release of the Kadena<>Cosmos bridge being the most important one.

You can keep up to date with developments in the Kadena ecosystem by following the most recent news that come out. The two main ways to do that is to periodically check all the Kadena (KDA) specific web pages, or by following a central news source that posts updates as soon as they happen. 

Even if the network growth starts to stagnate, knowing about it just a bit too late can make your whole investment worthless.