We have seen many different ICOs in the past months that have garnered attention from the usual channels available to crypto-enthusiasts, but Kik’s announcement of their plans for the Kin Token is different.
Mainstream media picked up the story immediately, with sites like Bloomberg Technology, Forbes and Reuters all jumping on the news. All of them seem to think that the Kik’s future launch of the Kin Token takes things to a new level.
As you are probably aware, the vast majority, if not all, of the Initial Coin Offerings that have taken place are for companies that are pre-revenue, some still in concept stage and others in development. They launch their ICOs to raise capital, instead of going to Venture Capital Firms, to develop their products. They offer interested enthusiasts the opportunity to contribute and take ownership in a new company and technology that they normally would not be able to.
Kin from Kin Foundation on Vimeo.
Why is Kik’s Kin Token Different?
As opposed to the new blockchain Companies that use the ICO in the way described above, the Kik announcement to introduce the Kin Token is different. Kik Interactive, which was established in 2009 and raised about $120 million “real dollars” in the past, is a well established app with an estimates 300 million downloads and 15 million active monthly users.
This announcement may change the way established news avenues and investors look at the whole “ICO Phenomenon”. The new Kin Token will be launched on the ever-growing Ethereum Blockchain. Today Kin released its whitepaper outlining the strategy to bring the Kin Token to market.
The Kik Chat application already has already introduced “Kik Points” in the past, which enabled users to access advanced features of the app. Ted Livingston, the CEO of Kik said that they have been looking at the idea of a Token to replace the Kik Points since 2011. Kik defines their motivation on the new kin.kik website (link in Resources section below) as follows.
“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.”
Why Does Kik Need The Kin Token?
Kik has been looking for a way to monetize their user base without compromising the user’s experience and privacy. Kik prefers not ot go the route of mass advertising like so many other apps have but would rather build their token on blockchain technology to move them foreward and monetize their app.
Kik knows that this venture is not a simple one. Here is an excerpt from the Whitepaper:
“To foster an ecosystem that is not only open and decentralized but also more compelling than its traditional counterpart, Kik must create a series of new products, services, and systems. Building a decentralized system is a complex process, and the transition to it must be done in a measured and responsible way over time.”
In order to achieve this goal, the first step is to develop a new digital currency, in the form of the Kin Token. Kik is not new to the idea of incentivising their users as mentioned above they introduced the Kik Points. They saw this as a way to test the users to see if they would be interested in earning and spending a centralized currency within the app. It was a great success with volumes of transactions monthly dwarfing the transaction volume of Bitcoin.
As Kik realized that the user based were happy using a centralized reward system, they decided that undoubtedly the use of a decentralized system based on blockchain would be even more accepted. The token will allow Kik users to earn the tokens as rewards by providing value to other members of the Kik community. Another excerpt from the whitepaper states that:
“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.”
Kik sees this as the begining of a new “Kin Ecosystem” which will attract other digital services and applications into the decentralized ecosystem. They don’t see this as just a way to monetize the current app in its current form but a way to revolutionize it.
Distribution of the Kin Token
The majority of the tokens will be allocated to the operation of the Kin Rewards Engine that will be the center of the Kin Ecosystem. The tokens will be released periodically to its partners in the Kin Ecosystem. The reward for each partner will be allocated proportionally based on the use of Kin by that partner. Kik is establishing the Kin Foundation, a nonprofit organization, to provide oversight.
For technical description of the Kin Token and how they will deploy via Ethereum’s ERC20 token please see the whitepaper.
Kin Token Summary
We see the introduction of the Kin Token, a blockchain digital asset into the marketplace as possibly the first step, with other established companies joining the party. Whether or not it actually gives more validation to the ICO frenzy is yet to be seen, but if other established companies follow it could change the ICO playing field.
Resources
Website
Whitepaper ias available for download on the website