Kaspa, a proof-of-work blockchain utilizing BlockDAG architecture, has attracted institutional mining interest from Marathon Digital Holdings and recorded over $35 million in whale accumulation during November, following an 87% price crash in October that tested the network's resilience.
Marathon Digital, the largest publicly traded Bitcoin mining company in the United States, announced in June last year that it had expanded operations to include Kaspa mining.
The decision came as the company sought revenue diversification following Bitcoin's April 2024 halving event, which reduced block rewards for miners.
Technical Architecture And Performance
Kaspa operates on a BlockDAG (Directed Acyclic Graph) structure combined with the GHOSTDAG consensus protocol, differentiating it from traditional blockchain architectures that follow longest-chain rules.
The network produces blocks every second, compared to Bitcoin's 10-minute block time.
In October 2025, Kaspa's mainnet underwent a stress test processing 4.62 million transactions over 2,100 seconds, achieving an average throughput of 2,200 transactions per second with peak capacity reaching 4,836 TPS, according to network data published by the project.
The BlockDAG structure allows multiple blocks to be produced simultaneously and incorporated into the ledger without creating forks, enabling the faster block production rate while maintaining proof-of-work security mechanisms.
Marathon Digital's Mining Strategy
Marathon Digital cited Kaspa's one-block-per-second production rate as a key factor in its decision to mine the asset.
The faster block production theoretically allows miners to earn more block rewards within a given timeframe compared to Bitcoin's 600-second block intervals.
The company did not disclose the percentage of its hash power allocated to Kaspa mining or revenue generated from the operation. Marathon's primary business remains Bitcoin mining, with Kaspa representing a diversification strategy rather than a core operational shift.
Marathon Digital operates over 25 exahashes per second of Bitcoin mining capacity as of mid-2024.
The company has not published specific hardware allocations or profitability metrics for its Kaspa mining operations.
Market Volatility And Recovery
Kaspa's token experienced severe volatility last month, crashing 87% to $0.028 during what market participants described as one of the largest liquidation events in cryptocurrency history.
The token had traded near $0.09 in September 2025 before the decline.
Following the October crash, KAS recovered to $0.057 as of Nov. 28, representing a doubling from crash lows but remaining approximately 37% below its September peak.
The token ranked as the top daily gainer on CoinMarketCap on Nov. 27 before retreating 6.3% in the subsequent 24-hour period. Kaspa currently maintains a market capitalization of approximately $1.53 billion with roughly 27 billion tokens in circulation.
Whale Accumulation Activity
On-chain data indicates that eight wallet addresses purchased more than $35 million worth of KAS during November as the token price recovered.
The accumulation occurred as KAS posted gains exceeding 15% during the month.
The wallet addresses have not been publicly identified, and the accumulation pattern does not confirm whether purchases represent institutional investors, high-net-worth individuals, or coordinated buying groups.
Whale accumulation during recovery periods can signal confidence in an asset's fundamentals or represent attempts to influence price through large purchases.
The specific motivations of the November buyers remain undisclosed.
Smart Contract Development Status
Kaspa is categorized by data aggregators including CoinGecko as a "Smart Contract Platform," though the network does not currently support smart contract execution on its base layer.
The project's roadmap references implementing smart contract functionality through "based-rollups," a layer-2 scaling approach that settles transactions on the main chain without fragmenting liquidity across multiple sidechains.
In October 2025, Kaspa announced integration with Dymension, a modular blockchain network, to support bridge infrastructure.
The announcement did not specify whether this integration enables smart contract functionality or serves as preliminary infrastructure for future based-rollup deployment.
Mining Economics And Competition
Kaspa's appeal to miners centers on its block production frequency.
While Bitcoin miners compete for rewards every 10 minutes, Kaspa miners compete for rewards every second, theoretically increasing reward frequency even as individual block rewards may be smaller.
However, Kaspa's mining difficulty adjusts based on network hash rate, similar to Bitcoin's difficulty adjustment mechanism.
Increased miner participation raises difficulty, reducing the probability of any individual miner successfully producing blocks, which can offset the advantage of faster block times.
Kaspa competes with established proof-of-work networks including Bitcoin, Litecoin, Ethereum Classic, and others for mining hardware and hash power.
The network also faces competition from proof-of-stake networks including Solana and Avalanche, which achieve transaction throughput exceeding Kaspa's demonstrated capacity without requiring energy-intensive mining operations.
Community Governance Activity
In November, the Kaspa community conducted a vote regarding leadership of the project's primary social media account @kaspaunchained. The proposal received 95% approval from participating voters, though total voter participation figures were not disclosed.
The vote reflected community engagement in project governance decisions, though Kaspa does not operate a formal on-chain governance system comparable to proof-of-stake networks with token-weighted voting mechanisms.
Technical Limitations And Trade-offs
Kaspa's BlockDAG architecture achieves faster block production than traditional blockchains but introduces complexity in node synchronization and network consensus.
Nodes must process and validate multiple simultaneous blocks rather than a single chain, increasing computational requirements for network participation.
The network's proof-of-work security model requires continuous energy expenditure to maintain consensus, similar to Bitcoin. Kaspa has not published energy consumption metrics or comparisons to other proof-of-work networks.
The absence of native smart contract functionality limits Kaspa's current use cases primarily to value transfer and storage.
Until based-rollups or alternative smart contract solutions launch, the network cannot support decentralized applications, decentralized finance protocols, or non-fungible token standards without relying on external bridge infrastructure.