Chainweb combines a number of parallel chains that operate individually in a single network. Each PoW chain operates the same currency and contains references (Merkle root subset) to the previous block of their peer chain, so peer chains can confirm each other's blocks and stay liquid can be transferred between strings. This approach is different from sidechains, as each individual chain has the same capabilities as the main chain. Chainweb's design started with the idea of adding Bitcoin's Simple Payment Verification (SPV, platform of lightweight clients) capabilities that allow users to verify a transaction without processing the entire Blockchain by querying the chain for a Merkle proof. Unlike Bitcoin, Kadena is account-based, not UTXO.
In Kadena, the SPV smart contract enables automatic cross-chain token transfers while managing the supply of a single currency on the network. Chainweb transfers move a token (or tokens) by deleting it on a chain and issuing a new token on a peer-to-peer chain. The SPV proof is used to verify that the initial deletion is complete before another chain can generate a new token. The deletion’s transaction ID can only be used once, so each SPV deletion proof can only allow a single create function.
Kadena uses Pact smart contract language designed to be readable and verifiable by computers. Instead of requiring the storage and calling of large streams of lower-level bytecode like EVM, the code stored in the Blockchain is exactly what the application developers wrote and can be read in its original form. Pact also provides a secure solution for implementing business logic on the blockchain, such as applying rules with clear error messages, modeling and maintaining database schemas, and authorizing users to perform sensitive operations. It is intentionally designed to be inclusive in the belief that such use cases are inappropriate in a resource-constrained blockchain environment. This property allows for formal verification where the code is transformed into a mathematical model of its function, which is then used to demonstrate that the properties of this model meet certain conditions.
Use of Native tokens in the ecosystem:
KDA is used to pay for gas and as a miner's reward for producing new blocks.