We decided to take a closer look into the KIN ICO.
Website: https://kin.kik.com/
ABOUT
Their goal is to create a new decentralized ecosystem of digital services for daily life. They want to empower consumers and not sell their attention and data to advertisers. Kin will be the primary transaction currency in this ecosystem that will be built in the combination with the existing Kik application.
Kik will use its extisting user base to drive mass adoption.
KIK (Company)
Kik has been a leading innovator in the chat space since the first million people signed up for the chat application in 2010. Kik was the first chat app to become a platform in 2011, and the first Western chat platform to integrate bots in 2014. Throughout 2015 and 2016, Kik also experimented with a form of digital currency on its platform, called Kik Points.
Today, Kik is one of the world’s most used chat apps and the fifth most-searched term in the iOS App Store. The millions of people who use Kik each month are in a unique position to demonstrate how cryptocurrency economies might form and function in the context of a large, mainstream user base.
Kik will build fundamental value for the new currency by integrating Kin into its chat app.
The Kin Rewards Engine will use economic incentives to bring other digital services and applications into the decentralized Kin Ecosystem. Inspired by previous systems like Bitcoin’s block rewards and Steemit’s posting rewards, the rewards engine will create natural incentives for digital service providers to adopt Kim and become partners in the ecosystem. The ecosystem will not impose any unnecessary restrictions or tolls on monetization strategies, beyond ensuring common ethics and legality of content and transactions. As more partners join, the network effect of the Kin Ecosystem will grow, building the value of the currency, and in turn encouraging new partners to join this initiative.
They also mention they would like to work with other firms to develop and advance the blockchain technology.
Kin (Foundation)
Kin Foundation will be an independent, non-profit and democratic governance body for the members of the Kik ecosystem. It will focus on delivering a Transaction Service that will enable centralized digital services to utilize Kin at scale, implementation of the Kin Rewards Engine and a decentralized identity service for users of Kin.
KIN (Cryptocurrency)
KIN is ERC20 token.
Kik is introducing an open source cryptographic token, named KIN, which is envisioned as a general purpose cryptocurrency for use in everyday digital services such as chat, social media, and payments. Kin will be the unit of account for all economic transactions within the Kin Ecosystem, and it will serve as the basis for interoperability with the other digital services.
It will be built on the Ethereum platform.
Kin has a fixed supply. It is fractionally divisible and long-term non-inflationary. Only a small portion of the Kin supply will become liquid in the near future as most of the Kin supply is reserved for the Kin Rewards Engine.
Kin will be Kik’s primary transaction currency, and Kik will be the first service to join the Kin Ecosystem. In the future, users will be able to earn by providing value to other members of the Kik digital community through curation, content creation, and commerce. Kik users will be able to spend Kin on products, services, and other valuable assets offered by merchants, developers, influencers, and other participants.
Kin will sit at the center of a new digital economy inside Kik, driving demand and fundamental value for the cryptocurrency. Its resulting value will enable the launch of an economic incentive mechanism, the Kin Rewards Engine, to further grow the ecosystem.
The recent 2016 experiment with Kik points showed that there may be a lot more transactions with this new crypto currency that is currently supported on the Ethereum blockchain. They suggest a hybrid solution that creates a semi-centralized system but in the long term, the Kin Foundation will migrate from the transactional infrastructure to a fully decentralized system while retaining a low friction user experience. (This is only an assumption… will see how that plays out).
KIN (Use case)
It will be used to compensate ecosystem partners based on each service’s contribution to Kin’s overall growth.
All the use cases they have stated in the whitepaper are connected to the Kik app:
– VIP groups (bidding to join the group)
– Premium user-generated content (charging for content)
– get notified instantly – shout out messages (fee)
– tipping (sending a tip to support good content)
– bot monetization (bot can charge users)
– Brand missions ( brands can directly engage with the users and encourage them to use their products and advertise them and get paid with KIN)
KIN (Supply)
Total supply of Kin: 10 Trillion units
First sale: 1 Trillion units (They will use this to fund Kik operations and to deploy the Kin Foundation and to execute additional features development planned for the Kin to integrate into Kik.)
3 Trillion Kin will be allocated to Kik as the founding member of the Kin Foundation. In exchange, Kik will provide start-up resources, technology, and a covenant to integrate with the Kin cryptocurrency and brand. They will be unlocked and distributed to Kik at 10 percent per quarter, for 10 quarters.
The remaining 6 Trillion Kin will be under the purview of the Kin Foundation, locked under the Kin Rewards Engine scheme and will be used for the growth of the Kin Ecosystem and fund the operations of the foundation. These are:
– administration of the Kin token supply and Kin Rewards Engine
– marketing
– operational costs.
This will be released over time at a rate of 20 percent of the remainder per annum and in perpetuity.
Source: KIN white paper
Token distribution will start when Kik completes the technology upgrade so that Kin can be used in Kik.
KIN (Rewards Engine)
The Kin Foundation will oversee the uncirculated KIN.
60% of the total supply of Kin will be secured in a smart contract, allocated to the Kin Rewards Engine and introduced into circulation as periodic rewards. Every year, 20 percent of the remaining rewards allocation will be issued as periodic incentive payments, diminishing over time as the currency gains overall value.
Source: KIN white paper
The Kin Foundation will use up to 5 percent of the reward allocation (up to 3 percent of the total supply of Kin) for operations and marketing.
In the long run their goal is to implement Kin Rewards Engine in the form of an autonomous and trustless system. There are a lot of loose ends here and in order for us to assess this rewards engine we need to see the technology behind it and really see if this will work as they described it.
TEAM
Kik Executive Team
Ted Livingston, Founder, and CEO, Kik
Successfully running the company from 2009. managed to raise over 120 million USD from investors and is actively included in the University of Waterloo’s Velocity Fund – Startup accelerator.
Peter Heinke, CFO and COO, Kik
Leading compliance for the token sale and development of the corporate structure for Kin and the Kin Foundation. Has 20+ years of experience in finance, operations, and strategy in established companies in the media, technology and transportation sectors.
Eran Ben-Ari, CPO, Kik
Experience with communications company Rounds that later joined Kik. He will oversee the product process, lifecycle, and strategy.
Dany Fishel, President, Kik Israel
Oversees the technical and product teams responsible for Kin and the Kin Foundation. He was the co-founder of Kwakwa, a strategic web consulting firm and has managed to advertise for a big gaming company.
Kin Core Team
Leonid Beder, Blockchain Security Architect
Gadi Srebnik. Blockchain Security
Jairaj Sethi, Blockchain Architect
Oded Noam, Blockchain Architect
Yohay Barsky, Ledger, and Mobile Wallet Engineer
Naama Hadad, Economist, and Data Analyst.
In the whitepaper, there are 13 people stated in the Kin Core team. Three of them come from the Austrailian Bitcoin Exchange Cointree.
Lead Advisors are from CoinFund (open community for blockchain technology research) and CoinTree.
Jake Brukhman, Aleksandr Bulkin, Alexander Felix, Oleg Golubov; CoinFund
Uriel Peled, Daniel Peled; CoinTree
Amir Chetrit; CoinTree / Ethereum Founder.
Overall team has a lot of experience in the digital and technology field. We can also see they managed to add a lot of blockchain technology experts to their core team. The advisors are also very experienced and known in the blockchain community. The competency of the team is therefore at a really high level in our opinion.
CONCLUSION
The Kik team is creating this currency to be the most widely used possible, but on the other hand, they are tying it to an app (but an app with massive user base). The biggest question here is if Kin can actually get adopted by the masses. Kik points experiment showed us it can be done, but this on-chain off-chain hybrid solution will be much harder to implement and it will be interesting to see how the users of the Kik app react. If it takes off and gets the mass adoption they are hoping for, this could be huge since they already have a huge user base, but if it doesn’t kick off in the Kik app, it won’t kick off anywhere.
Significant advances will need to be made in the blockchain technology for their idea to work on such a scale. This can take a lot longer than expected.
There is a huge issue we see regarding the token sale and distribution. Only 10 percent of all the tokens will be sold, while 60 percent of the tokens are going to be distributed through the “reward engine system” and 30 percent are going to the founder company for operations, marketing and administration. 90 percent of the tokens will, therefore, be tied to the founders through the Kin Foundation and Kik company, which is too much and it is not explained in the way that we would believe that they really need that much.
We are still waiting for the technological white paper so this information is everything we have currently and cannot do the full 12 points analysis comparing KIN ICO to an ideal ICO. We will have to wait for further details to fill in the blanks and decide whether to invest in this ICO or not.
Stay tuned.
LINKS
http://fortune.com/2017/07/21/cryptocurrency-digital-money-ico/
https://www.coindesk.com/armed-with-an-ethereum-ico-can-kik-succeed-where-facebook-failed/
https://kin.kik.com/papers/Kin_Whitepaper_V1_English.pdf
https://techcrunch.com/2017/06/20/kik-ceo-claims-an-ico-is-better-than-venture-fundraising/
https://www.cnbc.com/2017/07/11/kik-looks-to-cryptocurrency-instead-of-an-ipo-commentary.html
Peter, Crypto-Trader Club