Digital services, such as chat apps and social networks, are bringing together communications, information, and commerce in new and unprecedented ways. For future generations, this will be a natural and core aspect of their daily lives.
At the same time, more and more of these services are controlled by a diminishing number of companies. If left unchecked, a few private companies are poised to exercise absolute authority over the digital services everyone uses, effectively eliminating consumer choice on a global scale.
Decentralization provides a sustainable way forward. We believe that a broad group of participants can come together to create an open ecosystem of tools for digital communication and commerce that prioritizes consumer experience. As a key player in the chat space, we are compelled to lead the change required to bring a fair and user-oriented model for digital services to the market.
Kin is a cryptocurrency designed to bring people together in a new shared economy.
Envisioned as a general purpose cryptocurrency for use in everyday digital services, Kin will be used for all transactions within the Kin Ecosystem. Implemented on the public Ethereum blockchain as an ERC20 token, Kin will serve as the basis of interoperability with other digital services in the Kin Ecosystem.
Kik will be the first digital service to join the Kin Ecosystem.
Kin will power a digital economy inside of the Kik app. With millions of users, Kik will drive mainstream consumer adoption of Kin, establishing fundamental value for the cryptocurrency. By natively integrating the Kin wallet into the app, it will instantly become one of the most adopted and used cryptocurrency wallets in the world.
The Kin Rewards Engine is an innovative cryptoeconomic structure intended to promote the use of Kin as a common currency.
Through the Kin Rewards Engine, Kin will be introduced into circulation as a daily reward, to be distributed among stakeholders by an algorithm that reflects each community’s contribution to the overall ecosystem. This economic structure will create a natural incentive for owners of other digital services to adopt Kin and become partners in the Kin Ecosystem.
The Kin Foundation will act as the non-profit governance body for the Kin Ecosystem.
The Kin Foundation’s mandate is to grow an open ecosystem of digital services that consumers can easily explore and find value in, while giving developers an open and sustainable platform to build, enhance and monetize those services. Over time, the Kin Foundation will ensure the delicate transition of the Kin Ecosystem into a fully decentralized and autonomous network.
- Will be the unit of account for all economic transactions within the Kin Ecosystem, and it will serve as the basis of interoperability with other digital services - Kin is a pure cryptocurrency of fixed supply. It is fractionally divisible and long-term noninflationary - Most of the Kin supply is reserved for the Kin Rewards Engine - Kin are fungible and transferable, and they will be expected to trade on cryptocurrency exchanges - Provides choice and incentives for users and developers
Attention. There is a risk that unverified members are not actually members of the team
Opportunities:The Kin token will immediately be used by a large base of users. This is something that almost no other token can achieve right now.The project has generated a lot of media awareness as it is the first ICO initiated by an established company.Kik/Kin has a proven team with strong background and they have worked together to create a very popular messaging app.Kik’s target users are mostly teens aged 13 to 24 years, so this could potentially speed up the adoption of cryptocurrency.The tokens benefit from the network effect. The more people use Kin, the more valuable the tokens will become.If Kin tokens can grow beyond the Kik platform and are used in other apps/platforms, the potential upside will be substantial.
Concerns:The fundraising amount is high – $125 million represents only 10% of the tokens, implying a $1.25 billion market cap on a fully diluted basis.In order for the Kin project to be successful, it needs to grow beyond the Kik platform and we believe this is a daunting task with a low chance of success. Ether is already doing what Kik is aiming to do for Kin in the long run. We don’t see a need for a separate Kin token especially when Ether is more widely accepted.Kin tokens will face high inflation – in just 1 year, token sale participants’ share of the circulation will drop from 100% to merely 29%.The market cap for Kin needs to grow to $431 million in one year just for ICO participants to break even.ICO participants are not necessarily existing Kik users – the ICO doesn’t really help Kik rejuvenate its user base.One of the benefits of a token sale is to create a community of token users to kickstart the ecosystem. However, this is unlikely to be the case here since teens are the target users of Kik.If Kik tries to change its user base, it could cause existing users to leave the platform.No future development roadmap is provided in the white paper. Without a development framework, there is no way of knowing what the key milestones are, how long it would for take them to reach those milestones, and no way of holding them accountable.
Conclusion:Overall, we are neutral on this ICO for short-term potential and negative on its long-term potential. We believe Kin is going to help Kik’s current users learn about crypto, but it won’t help bring in as many new users to Kik as the company thinks.Our thoughts of the tokens for short term and long term are as follows:For short-term holding:Neutral. The project has generated a lot of buzz and have several blockchain VC investors backing it. However, the VCs got their tokens at a 30% discount. It is not specified whether there is a lockup for the tokens held by the VCs. In 0x Project’s case, Polychain Capital sold a portion of their tokens just a few days after the ICO. If the same thing happens to Kin, it would create selling pressure (VCs are more willing to sell at a lower price because their cost base is lower) and that would make the short-term potential less attractive.For long-term holding:Negative.We have seen failing startups tap into ICO funding in order to stay afloat. These projects seem promising at first sight because they already have a working product and sometimes have funding from VC firms. However, the market will remain skeptical of their products which makes it hard for those projects to be successful, even after receiving ICO funding.As for Kin, we wouldn’t go so far as saying Kik is failing, but it is indeed declining and still exploring new ways to grow the company again.As one of the largest ICOs this year, the project doesn’t have enough growth potential and opportunity for us to justify its valuation.
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