Kaspa Dollar Publishes Whitepaper for KAS-Backed KSD Stablecoin

Kaspa Dollar has released a working whitepaper for KSD, a proposed stablecoin collateralized exclusively by KAS, the native asset of the Kaspa proof-of-work network. The developers state that KAS would be the only accepted collateral, tying the system directly to Kaspa's own proof-of-work security rather than to outside assets.

The publication is a draft, not a launch. The whitepaper remains open to internal and external review, and the developers say details may change before any contracts ship. For practitioners, that distinction matters: nothing in the document is final code, and every parameter below should be read as provisional.

How the proposed design works

The draft architecture has three defining features:

• Vault-based minting. Users would lock KAS in vaults to mint KSD. The mechanism resembles overcollateralized stablecoins already common in DeFi, where users deposit more crypto than the value of the stablecoin they receive. French outlet Cryptoast gives a concrete example: locking $150 worth of KAS would allow a user to issue $100 of KSD — a 150 percent collateral ratio on that position.
• Miner-voted price feed. Miners would vote on the price feed that keeps KSD near its $1 peg. No third-party oracle would be involved, which removes a common attack surface in DeFi stablecoin designs — oracle manipulation — but replaces it with a question about miner coordination and vote integrity that the review process will need to address.
• No admin key, no developer fee. The proposed contracts would carry no admin key and no developer fee, according to the developers. An absent admin key means no party could unilaterally upgrade, pause or redirect the contracts after deployment. It also means no recourse mechanism if a flaw is discovered post-launch; immutability cuts both ways.

What does this change for Kaspa users?

In practice, the proposal would give KAS a native DeFi building block: a dollar-denominated instrument minted against the chain's own asset, secured by the chain's own miners, and governed by contracts that no developer can reach into. If the design survives review, Kaspa users could access dollar exposure without leaving the ecosystem or trusting external collateral issuers.

The overcollateralized model is well understood. A 150 percent ratio on a hypothetical position, as in the Cryptoast example, means $150 of KAS backs $100 of KSD, leaving a 50 percent buffer against price declines before liquidation pressure arises. The trade-off is capital efficiency: users lock one and a half dollars of value to obtain one dollar of stablecoin.

Open questions the review must resolve

The whitepaper leaves material questions on the table. How miner voting prevents price-feed capture, how vaults handle liquidations during sharp KAS drawdowns, and how the system maintains its peg under stress are the operational issues any overcollateralized stablecoin must answer. The developers' decision to publish before finalization signals that these points remain in motion.

The document is now in the hands of internal and external reviewers, and the next concrete milestone to watch is a revised draft or audited contract release that locks the collateral, oracle and fee parameters into final form.