Kaspa’s tokenomics are mostly about float, not vesting charts
Kaspa is a Proof-of-Work, UTXO-based L1 that pushes throughput by ordering transactions across a blockDAG rather than a single linear chain. It moved mainnet from 1 block per second to 10 blocks per second on May 5, 2025 via the Crescendo upgrade, with a 100-millisecond block time.
KAS is the native asset that (1) gets minted to miners through block rewards under a fixed monetary policy and (2) pays transaction fees, which are computed as the gap between total inputs and total outputs in a transaction.
If you care about price formation, Kaspa’s defining token design choice is simple. There is no insider unlock schedule to handicap the market later. The market already absorbed most supply issuance early, and the “unlock” that remains is basically ongoing miner issuance on a decaying curve.
If you want a framework for evaluating these levers across projects, our overview of token design components can help structure the analysis.
Supply and emissions: capped, smooth, and heavily front-loaded
Kaspa’s hard cap is 28,704,026,601 KAS, and the official emission policy describes the max supply as “~28.7 billion KAS.”
The emission policy has two phases.
- Pre-deflationary phase: began at mainnet start on November 7, 2021 and ended on May 8, 2022. For the first 2+ weeks, block rewards were random in the range 1 to 1000 KAS per block, then switched at the first hard fork to a constant issuance rate of 500 KAS per second (with 1 block per second at the time, that was 500 KAS per block).
- Chromatic phase: after May 8, 2022, rewards decrease geometrically over time. The initial chromatic block reward was 440 KAS. Rewards “halve once per year, but smoothly,” with a monthly reduction factor of (1/2)^(1/12).
Two details matter for liquidity modeling.
First, issuance is defined per unit time, not per block. The monetary policy dictates how many coins are minted per second regardless of the block rate, so if blocks per second change, per-block reward is adjusted to keep the same per-second emission.
Second, Kaspa’s supply is structurally front-loaded. The official tokenomics post lists these supply milestones: about 15.3B mined by January 1, 2023, about 21.9B by January 1, 2024, and about 25.1B by January 1, 2025. It also states that about 95% of all KAS will have been mined by July 10, 2026.
In other words, FDV narratives are a distraction here. Using common market-tracker figures, total supply is often shown around 27.26B KAS versus max supply 28.70B KAS, leaving roughly 1.44B KAS unissued, about 5% of the cap.
For live float, Kaspa’s public API reports circulating supply directly. On March 7, 2026, the circulating supply endpoint returns 27,236,145,240.94794 KAS.
One nuance worth flagging. Some market data sites label remaining issuance as “locked,” but Kaspa’s own docs emphasize a fair launch with no vesting phase or premine, which implies remaining supply is unminted rather than time-locked by an issuer.
Allocations: there is no insider overhang, which changes the whole trading game
Kaspa’s own materials explicitly position the network as fair-launched with no ICO, no premine, and no vesting phase. The project also states “no pre-mine, no ICO, no pre-sales, and no coin allocations,” dated at launch November 7, 2021.
- Proof-of-work mining issuance: 100% of KAS enters circulation through block rewards over time, with no vesting schedule and no pre-allocation described in official materials.
This is the cleanest possible supply story. It also creates a specific liquidity structure.
For a PoW asset with a very different supply curve, compare this with Ethereum Classic tokenomics.
With no stake lockups and no foundation wallets waiting to unlock, the real “vesting contract” is the mining industry’s balance sheet. Miners continuously receive issuance and choose between holding and selling to cover capex and opex. That is where KAS distribution and sell pressure actually come from.
The design is not accidental. Kaspa’s tokenomics post states the emission schedule was made short and deflation fast in part to blunt ASIC dominance, so “most of the circulation will be minted by the time ASICs appear.”
From a liquidity-structure perspective, this has a trade-off. You remove headline dilution risk. You also compress distribution into a short window, which can amplify cyclical miner-driven liquidity if demand is not rising at the same pace as new supply is being produced and sold.
Effective circulating supply: “circulating” is not the same as “for sale”
Kaspa is unusually close to its terminal supply early in its life. That supports the popular line that KAS has “low dilution ahead.” That part is mechanically true given the emission curve and the cap.
But tradable float depends on custody and time preference, not just issuance.
Three float realities tend to matter more than FDV:
1) Miner inventory management. As block rewards decay smoothly each month, miners face a steady reduction in gross KAS inflows, not a discrete “halving day” shock. That smoothness is good for planning. It also means the market never gets a single coordination focal point where everyone suddenly reprices supply overnight.
2) Exchange float is a separate layer. Kaspa’s fair launch reduces the chance of concentrated vesting cliffs. It does not prevent exchange custody concentration over time. If spot liquidity is dominated by a few venues, a meaningful slice of “circulating” behaves like semi-captive float until users withdraw.
3) UTXO structure can create incidental friction. Kaspa uses a mass-based fee model where UTXO selection affects transaction mass and fee. That is not a supply lock, but it is a micro-liquidity consideration for active users and apps when network conditions tighten.
The upshot is practical. In Kaspa, “circulating supply” is already close to “final supply.” What moves markets is marginal flow. Miner sell flow, exchange net deposits, and fee-driven demand for blockspace.
Utility and fiscal flows: mass-based fees, miner revenue, and no burn sink
KAS has straightforward L1 utility. It is used to pay transaction fees, and miners collect both block subsidy and fees through block production incentives. The official feature documentation discusses miner profit directly in terms of including transactions that pay fees.
On the mechanics, Kaspa fees are computed as fees = sum(inputs) − sum(outputs), as described in the transaction fee docs. Fees are tied to transaction “mass” measured in grams, and the docs list a 100,000 gram per-transaction mass limit (mempool standard) and a 500,000 gram per-block mass limit (consensus rule).
Fee rates are expressed in sompi per gram, where 1 KAS = 100,000,000 SOMPI. The fee model uses a “fee rate” multiplier where a fee rate of 1.0 is described as the minimum accepted fee rate.
For wallets and apps, Rusty Kaspa provides a getFeeEstimate() RPC that returns recommended buckets (priority, normal, low), with feerates explicitly defined as fee per transaction mass in sompi/gram.
Kaspa’s own feature doc argues that parallel block production can “smooth out” fee market dynamics by changing miner transaction selection incentives under parallelism. The page frames this as reducing race-to-the-bottom behavior and limiting starvation effects under congestion.
Token flow-wise, there is no protocol-level burn described in official materials. The monetary policy is a capped issuance schedule with declining block rewards and fee payments that accrue to miners. The economic question is not “what gets burned,” it is whether fees can eventually carry enough of the security budget as issuance decays.
Governance and parameter control: no foundation, KIPs, and crowdfunded upgrades
Kaspa’s official positioning is explicit: “no premine” and “no central governance,” with a community-driven development posture closer to Bitcoin than to foundation-led L1s.
That does not mean parameter changes never happen. They happen through software upgrades and hard forks, organized socially. Crescendo is the obvious example, activated on May 5, 2025 and taking mainnet from 1 BPS to 10 BPS. Ahead of that, Kaspa’s TN10 guide describes Crescendo as detailed in KIP14, with TN10 scheduled to shift to 10 BPS around March 6, 2025, and a mainnet upgrade targeted for late April or early May.
Kaspa also embraces community fundraising as a governance-adjacent mechanism for resourcing work. An official post states that a community crowdfund started on December 18, 2022 to raise 70,000,000 KAS for DAGKnight development, and that the goal was met on December 30, 2022.
The project’s “community governance” post frames decision-making as happening through community votes and crowdfunds, including funding for exchange listings and development efforts like the Go-to-Rust rewrite.
For tokenomics, the governance takeaway is narrow but important. Monetary policy is stated as fixed and time-based. If you are underwriting KAS on the assumption that “cap can’t change,” you are really underwriting social consensus around code conservatism, not an on-chain veto controlled by token holders.
Risk register: what can break the KAS token economy
Kaspa’s supply design is clean. No insider cliffs. A predictable decay curve. Most supply already minted. That pushes risk away from “dilution surprises” and toward security budget and market microstructure.
Dominant risk: security budget compression as issuance decays faster than fee demand grows.
Kaspa’s issuance declines continuously, halving each year on a smooth monthly schedule. Over the long run, the block reward falls toward zero, with the tokenomics post stating it takes about 36 years for the reward to drop below 1 sompi (effectively zero at 1 BPS), and noting that changing BPS shifts the timeline by log2(new BPS) years.
This creates a narrow economic requirement. Either fee volume and fee rates rise enough to replace subsidy, or hashpower declines until security matches what fees can actually pay for. Kaspa’s own feature documentation treats fees as a key part of miner incentives and discusses how parallelism affects miner selection and fee market dynamics.
Front-loaded emission makes the transition arrive sooner in narrative time. When most coins are already out, marginal issuance becomes small, and the security budget becomes more sensitive to fee market health than many investors intuitively price in. The mass-based fee mechanism and the existence of fee estimation buckets show the protocol is built to support a functioning fee market under load. That is still not the same thing as proving durable fee demand.
In a float-first framing, this is the real knife edge. If miner revenues trend down, miners become forced sellers into weaker liquidity. If miners exit, security weakens. If security weakens, long-term holders demand a discount rate that can outweigh any “nearly fully diluted” supply optics.
- Security budget shortfall, Trigger: sustained periods where transaction demand does not generate meaningful fee revenue as block subsidy decays. Mechanism: declining issuance (yearly halving with monthly decay) reduces miner income, causing hashpower to fall and raising reorg and censorship risk. Who bears it: users relying on final settlement and long-term holders underwriting PoW security. Measurable indicators: network fee rate buckets and confirmation-time targets from getFeeEstimate(), fee/mass dynamics, and persistent deterioration in miner economics versus subsidy schedule milestones. We also publish crypto research on how these indicators show up in market microstructure.
- Miner-driven liquidity shocks, Trigger: hardware cycle stress or rapid hashpower competition that forces higher immediate sell-through of mined KAS. Mechanism: in a fair-launch PoW asset with no vesting cliffs, miners are the dominant systematic source of new supply hitting the market, especially given Kaspa’s front-loaded emission. Who bears it: marginal buyers and leveraged holders exposed to drawdowns during sell-pressure spikes. Measurable indicators: proximity to emission milestones and remaining unissued supply, plus exchange netflow proxies and persistent sell pressure around issuance declines.
- Off-chain governance coordination risk, Trigger: contentious upgrades where miners, node operators, and ecosystem tooling fail to converge on a single protocol version. Mechanism: Kaspa explicitly operates with no central governance, and major changes like Crescendo occur via social coordination and software upgrade paths. Who bears it: integrators, exchanges, wallets, and users exposed to chain splits or extended instability during transitions. Measurable indicators: upgrade participation metrics during hardfork windows, client version fragmentation, and reliance on crowdfund-driven priorities rather than formalized on-chain governance.
If you are modeling KAS for investment, treasury policy, or application economics, treat it like a PoW commodity with a rapidly maturing float, not like a venture token with hidden unlocks. If you need help stress-testing assumptions around issuance-driven liquidity, fee-market breakpoints, or protocol change processes, that is where targeted tokenomics consulting and token economy design review can actually add value.
This article is part of our Tokenomics Deep Dive series.
