Wrapped Kaspa (wKAS) continues to spiral further from its intended 1:1 peg with native Kaspa (KAS), now trading at $0.028 versus $0.077 — a staggering 63% discount. This significant discrepancy underscores the vulnerability of wrapped assets when critical infrastructure, like cross-chain bridges, fails.
What Caused the Depeg?
As previously reported, the primary cause behind the ongoing price divergence is the paused bridge between Ethereum and Kaspa, managed by Chainge Finance. This pause has halted arbitrage opportunities, which would typically correct price imbalances between the two assets.
Despite Chainge Finance reaffirming that the wKAS/KAS peg remains 1:1 by design, liquidity constraints on Ethereum have led to a temporary but severe depeg. Heavy sell-offs of wKAS on Ethereum, paired with no ability to bridge it back to native KAS, have further skewed the price.
source: coinmarketcap.com
Transition and Technical Bottlenecks
The bridge was originally built to operate exclusively within the Chainge ecosystem. However, with the launch of Knot.meme, the infrastructure now faces pressure to support both trading and bridging functionalities across platforms. This transition prompted necessary security upgrades, which have delayed the bridge’s reopening and left wKAS liquidity on Ethereum virtually dried up.
Impacts and Uncertainty
At present, wKAS market cap has dropped to just $3.2 million, highlighting how confidence and utility have eroded in the absence of a functional bridge. Ethereum-based wKAS holders are effectively stuck, with few recovery options until arbitrage pathways reopen.
The Bigger Picture
This situation exemplifies the risks of relying on a single bridging mechanism to maintain liquidity and pricing parity across chains. Until the bridge is restored, the Kaspa price remains unaffected, but wKAS remains in freefall, with no clear timeline for recovery.
Whether @ChaingeFinance can restore the peg and rebuild trust in the wrapped asset remains to be seen — but for now, the depeg serves as a cautionary reminder of the fragility of cross-chain liquidity infrastructure in decentralized finance.
