What is Kin?
Kin aims to be the most widely used cryptocurrency in the world. Kin is unique because it was started by Kik Interactive, the developers of the Kik Messenger app for smartphones. Kik messenger is a top 10 messenger app with over 15 million monthly users. Kin will initially be integrated with the Kik app, but plans to expand into many different digital services. Kin’s goal is to create a decentralized ecosystem of digital services that economically aligns consumers and developers.
What is the Problem?
The problem is that app developers currently rely on ad revenue to make money. This monetization model hurts the user experience since most people would rather not be interrupted by advertisements. In addition, as Facebook and Google scaled massively, the old model of ad placement for monetization became unrealistic for smaller companies. In the long run, Google and Facebook’s dominance could dramatically decrease innovation and the ability for newcomers to compete. Ted Livingston, CEO of Kik states, “I think right now we are on a path to where digital services power everything we do in our daily lives, but they are all controlled and owned by a very few number of companies, to me that is a bit of a scary future”
Kin intends to create a new ecosystem of apps where partners, developers, and users work together. Kin proposes the “Kin Rewards Engine (KRE)” as the solution to ensure that everyone in the ecosystem is economically aligned. The KRE rewards services that transact with Kin with a portion of the daily payout based on the value that they provided Kin users that day. Sixty percent of Kin’s supply is allocated to power this engine. The Kin Rewards Engine economically incentivizes app developers to provide the most value possible to consumers without the need for advertisement.
According to its whitepaper, Kin “is envisioned as a general-purpose cryptocurrency for use in everyday digital services such as chat, social media, and payments.” It is currently an ERC-20 token on the Ethereum blockchain. There is a total of 10 trillion Kin. 1 trillion Kin were sold in ICO, 3 trillion are locked up for Kik and 6 trillion are to be used by the Kin Rewards Engine. Some example use cases proposed for the currency are:
- VIP Groups- VIP groups allow influencers to create premium, member only groups that require paid entrance fees. Celebrities and influencers can use this feature to engage with their communities and generate value for their time.
- Premium user-generated content: Creators can make content (audio, video and pictures) that is hidden until other users pay to unlock them. This incentivizes content creators and will ultimately lead to higher quality content.
- Shoutout Messages: This example allows users to promote messages by using Kin. Users can decide how much Kin to spend to gain attention of others.
- Tipping: Users can tip others for content they like
- Bot Monetization: Bots can perform services like order food for delivery in return for Kin.
- Brand Missions: Brands can pay users Kin for completing tasks such as making content or answering surveys.
Kin started to make progress on the project but still has a long way to go before realizing their vision. The alpha version of Kin’s implementation in the Kik app was already completed and had some encouraging results. Also, Kinit, a standalone wallet app is in beta and was already tested. Here are some important insights from the first phase of the private beta. Finally, the team is testing the Kin Ecosystem SDK which makes it easy for developers to integrate and engage with Kin.
The Kin team has recently decided to make their own blockchain which is a fork of Stellar Lumens. First, the team tried to use Etheruem but the scalability issues were a problem for the amount of micro transactions necessary with Kin. Then, the team tried to use a hybrid between Ethereum and Stellar. But the fees became too high with the Stellar mainnet. Creating their own blockchain is the best solution because it allows them to customize it to meet their own needs.
Kik has over 200 employees worldwide with almost a decade of experience in mobile and software development. Recently Kik has started working with some of the brightest blockchain minds in Tel Aviv. They have set up a joint office with Orbs, an independent next generation blockchain project that was founded by members of CoinTree. In fact, Kik recently hired four members of the CoinTree team to lead blockcahin developments in Tel Aviv.
The biggest issue with Kin for an investor is the massive token supply and inflation schedule. The “Kin Rewards Engine (KRE)” releases new tokens every single day. This means as a Kin investor your tokens are getting less valuable every single day, unless adoption can outpace inflation. Within 3 years ICO investors will have gone from owning 100% of the tokens to owning only 15%.
Kin excites BlockWolf because it already has a huge user base, is aiming to solve an important problem, and is developing at a rapid pace. Kin has the resources to attract developers to its ecosystem which is critical for developing the ecosystem. Also, Kin has received venture capital funding from elite institutions such as Tencent, which inspires confidence. Despite our excitement, we are very cautious about investing in Kin tokens due to the massive supply of tokens being released in the coming years.