Meet “Kinesis”: a new monetary system, with the stability of gold and the versatility of blockchain technology

Traditionally, metals like gold and silver have been used as means to exchange goods between different parties, but as society progressed throughout time and the economic activity became more complex, the need for broader and faster transactions began to grow.

Eventually, people realized that using only precious metals as currency wasn’t the best way to have a highly dynamic economy, therefore, gold-backed paper money was created, resulting in a much easier way when doing small transactions typical of everyday life, and since this paper money was backed by gold, it had intrinsic value and the same inherent stability as the gold.

However, as we all know, today’s paper money is not backed by gold anymore, which means the stability this precious metal could provide is no longer in place, leaving a lot of currencies with a constant risk of suffering horrible devaluation rates like the ones currently present in countries like Venezuela. A currency that is properly backed by gold has never suffered a catastrophic loss in value.

Current problems regarding our currencies and ways to store value

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One of the aspects that can make a lot of people decide not to participate in the blockchain industry, is the fact that these assets are certainly one of the most volatile people could buy. Anyone who is looking for a stable medium of exchange wouldn’t be able to use cryptocurrencies because their prices are constantly changing and pricing goods is practically impossible if there is no proper stability. With such a volatile nature, the risk to lose money is incredibly high, and most people aren’t willing to tolerate such a high level of risk, making them decide not to participate in this industry, even though it could change the world for the better.

On the other hand, transactions in general are done through the use of FIAT currencies, but as mentioned before, there will always be the risk of these currencies ending with a collapse because they depend on people trusting the government that is issuing the currency, and trust is something that can change in any moment. Not only that, even in countries with FIAT currencies that could be considered as stable, there is still some value being lost on a constant basis due to the low % of inflation that year after year adds up and little by little is erasing the value of people’s savings.

When it comes to actually acquiring precious metals, this type of transaction might not be very efficient regarding the amount of time required, there is always a lot of bureaucracy involved, and having access to an extensive variety of different options is not always possible, which reduces the capacity of making deals with the best possible conditions.

Nevertheless, every single one of the issues mentioned so far could be solved by Kinesis. What this platform is planning to develop, is to join together the stability typical of gold & silver, with the higher security and efficiency of blockchain technology, and allow for a new financial platform to improve upon the ways of exchanging values that we are using today. In short words, Kinesis wants to take the best of blockchain technology and the best of the traditional ways of storing value, to provide a new and improved monetary system capable of disrupting everything that has been done so far.

What is Kinesis and what solutions are they offering?

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Kinesis is a project where through the implementation of blockchain technology and the advantage of leveraging gold and silver as means to backup value, they plan to provide a new monetary system that doesn’t suffer from high risk of devaluation nor from high instability, effectively having the security of precious metals regarding their token’s prices, the safety of an immutable blockchain, and a fast transaction speed that is well needed in our fast paced modern society.

To realize all the potential implications Kinesis could have in the industry, we need to first understand the 2 types of tokens that will be used:

1. Kinesis Velocity Token (KVT) ^Source: this is a standard ERC20 token that will be used to finance the creation of the entire monetary system, once the trading is up and running, holders of this token will proportionally receive 20% of the fees generated by the transactions. This will encourage people to hold this token by creating a demand for it, as well as encouraging a high level of activity in the system. To know more feel free to take a look at the whitepaper

2. Kinesis Currency Suite ^Source: these are going to be the crypto currencies that are actually backed by gold or silver, Kinesis decided to fork the Stellar blockchain and have their own proprietary one ^Source. The gold backed token is called “KAU” and it represents “1 fine gram of gold” ^Source. The silver backed one is called “KAG” and it equals 10 grams of silvers. By forking the Stellar blockchain, Kinesis is able to offer transactions with a very high speed, and thanks to the precious metals, it allows the tokens to have a proper stability regarding their value.

Each time a new token is created, it means the number of precious metals backing them also increased, this way there will always be enough gold or silver properly guaranteeing the token’s value, and allowing them to be easily convertible.

To encourage a high level of activity in this new monetary system, Kinesis is going to have a high yield for people who decide to participate, based on the general level of activity from the users, it is important to know that Kinesis is capable of not only managing currencies backed by gold or silver, but it can pretty much handle any type of storage of value, and use it to back a new type of tokens in the future. Specifically, Kinesis can work with assets from the investments and fiat currency markets, as well as using other cryptocurrencies to back their tokens, but in the meantime, the only tokens used are those backed with gold and silver.

Security

It is very clear the precious metals holdings need to be completely secure to protect not only the customers, but also the stability of the system, this is why Kinesis has an important a reputable partner called Allocated Bullion Exchange (ABX), with years of experience handling the digital trading of precious metals. There are going to be extensive audits from third parties to guaranteed the holdings are totally safe, up to the point of working with “Deutsche Borse Group’s regulated commodity clearinghouse, European Commodity Clearing, who must also maintain approval and acceptance from the German financial regulator”. ^Source. It is clear the safety mechanisms to secure the precious metals backing the tokens are going to be top notch, and this is a key aspect for the success of Kinesis, because it all comes down on how effective this monetary system is in leveraging the stability of precious metals to facilitate transactions with non volatile tokens, ABX and the extensive experience on their behalf are certainly going to make sure that everything regarding the managing of silver and gold is done with the most upper standards.

Implications of having easy access to precious metals

People in general don’t have too much participation in the gold or silver market, probably because they might find the entire process to be very tedious, and the same happens with large orders, there is not enough modernity in how these trades are being done. However, with Kinesis it will be extremely easy to acquire tokens backed by these precious metals, it will be just like any other crypto trade and this will allow people to enjoy a level of stability that wasn’t possible before for any crypto currency, as well as making it much easier to participate in the gold and silver markets.

Besides, since spending these tokens is going to be something with no complications whatsoever, people will now have the opportunity of doing their purchases as if they were using actual gold or silver, and exchanging them for goods and services. Until now, something like this would be very impractical, but by adding blockchain technology and crypto currencies backed by these metals, it is now possible to do this through digital transactions, the very idea of precious metals holdings as something nonliquid would be gone as a result.

Elements of the Kinesis monetary system

Since the most ambitious goal is to create a new monetary system, it is expected for there to be a lot of sophisticated instruments meant to be used for all types of economic transactions. Specifically, there are 5 elements:

• Kinesis Currency Exchange (KCX) ^Source: this is where the tokens backed by gold or silver (KAU & KAG) are created, and the trading of the precious metals is done with the help of the already mentioned Allocated Bullion Exchange (ABX)
• Kinesis Blockchain Network (KBN) ^Source : this is where the aforementioned tokens can be used for general transactions or for savings purposes.
• Kinesis Blockchain Exchange (KBE) ^Source : this is simply an exchange for general trading between different crypto currencies.
• Kinesis Financial Network (KFN) ^Source : the financial network is what will allow the people to use the Kinesis tokens in common and everyday transactions, effectively allowing precious metals represented by the tokens, to act as a means of exchange. Users will have access to a digital wallet to store their tokens allowing them to earn interests , and more importantly, they will also receive “a Mastercard and Visa debit card and accompanying companion card” ^Source , which means, spending their tokens and actually using them in the real world will be extremely easy.
• Kinesis Commercial Centre (KCC) ^Source: as the name implies, people offering goods and services and being willing to take active part in this new ecosystem, will be able to list themselves and announce their availability to people using this platform.

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One of the things that make this monetary system quite different from what we are used to, is the fact that instead of being inflationary and having the currencies losing value on a constant basis, with Kinesis economic activity is encouraged because the most activity there is, the bigger the interest received by the people holding the tokens. There are going to be 4 different yields depending on the type of user:

Minter Yield

Minters are the ones capable of creating new tokens by investing USD or bullion holdings in exchange for Kinesis tokens. They will receive in perpetuity a % of the fees generated by the tokens they create and later used, therefore, the more dynamic this monetary systems is, the higher the potential rewards for its participants.

Holder Yield

This yield will be to people who decide to invest in these tokens, but won’t be an active participant in the economic activity. By simply holding the token in the corresponding wallet, they will also receive a return on their investment. This is “designed to compete with bank deposits, stock dividend yields, and rental property yields”. ^Source

Depositor Yield

This is similar to the 2 previous types of yield, in this case, people purchasing the tokens for the first time, will receive a % of the fees caused by the tokens they bought, in perpetuity, which means, they will always receive these fees as long as the system and those tokens remain active and in constant use.

Recruiter Yield

In this case, anyone who refers new users to the platform will receive a yield as a reward for the promotional work, they will receive part of the fees collected from the transactions of their referred users.

For more information regarding the different types of yield, their specific % and the potential return in numbers, make sure to read the blueprint

Use cases & applications

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Use case #1: protecting ourselves from inflation

Charles is a person who is always aware of the latest tech trends, and he also has a strong interest in finances. Unfortunately, the country where he is living is going through a horrible economic crisis, and a people are suffering severe consequences due to the extremely high inflation.

Right now, what Charles is looking the most is to protect his savings, he hates losing money because of irresponsible governments and he doesn’t feel safe using crypto currencies due to their inherent volatility. Luckily, he discovers the Kinesis monetary systems, and decides to put his savings into a token backed by silver, and after receiving his new debit card, he can use his money with ease without worrying about the high inflation, besides, he is also receiving the depositor and holders yield, which means he has a new revenue streams that weren’t possible before.

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In this case, we can see how can Kinesis be used as a way to escape from a circumstance where money is losing value rapidly, while still being able to do regular economic transactions with no complications.

Use case #2: passive income with no inflation

A company has an excess of cash and wants to invest in the silver and gold markets to diversify their holdings, but is unwilling to participate in over-the-counter trading because they consider it is very archaic. Eventually, one of the directors of this company finds out the existence of Kinesis, and together with the board, they decide to put an investment and purchase the KAU token backed by gold.

Now, this company not only has some of their holdings in a token backed by gold, but this investment is highly liquid, actually convertible to physical gold, and allows them to receive interests thanks to their holdings.

Use case #3: facilitating the participation in the gold & silver market

There is a precious metal producer interesting in expanding their client list and trying to sell their products to people from all over the world because this will help them gain recognition to their brand and allow for the company to grow larger. However, right now they are a very small producer and the only way they have to sell their precious metals is through the local market, making it extremely difficult to participate in larger markets where larger players usually make deals.

They are very frustrated because of this, however, after having a discussion with another participant in the local market, they are informed about the existence of Kinesis, and how this monetary system allows for anyone around the world to participate and trade their precious metals with no complication.

Now, this producer has a new opportunity to expand their activities and reach more people, certainly improving the revenue of their company.

Team

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EXECUTIVE COMMITTEE

ADVISORY BOARD

OPERATIONS TEAM

DEVELOPMENT TEAM

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Roadmap

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Token allocation

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Summary

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In the cryptocurrency industry, there is an inherent problem regarding volatility, these assets don’t have stable values, and this makes them unlikely to serve as a generally accepted medium of exchange.

When it comes to the gold and silver markets, there is a problem regarding access to both regular consumers and producers that aren’t large enough to participate in the big markets, making this industry less efficiency than what it should be.

Kinesis wants to solve these issues and improve upon the current monetary system, by joining the benefits of blockchain technology, with the traditional stability of precious metals. With Kinesis, there will be not only fast transactions but the people will also be protected by the immutability of the blockchain. With this new monetary system, activity is encouraged through the implementations of different yields that makes the participants receive a new revenue stream they didn’t have before, without devaluing any of the holdings.

The end result of a system such as this one, should be one where people are protected from inflation, where they can use a stable currency to make regular purchases with no issues, and is available worldwide with zero limitations, which will clearly increase the economic freedom of each and every single one of their users.

Finally, we can see here the problems that Kinesis can solve:

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