What is Kin by Kik?

Kin is one of the few token sales by an existing company, Kik, which has a working chat app (Kik Messenger). Kik decided to deploy an Ethereum-based token to expand into the area of blockchain services. The main concern of the Kin blockchain project is to de-centralize chat apps, which are being concentrated into the hands of a few Internet giants. Kin wants to monetize chat- to deliver economic value into communication systems.

Today, Kik is one of the best-used chat apps, high in the search term hierarchy at iOS App Store.

Kik by Kin

Kin White Paper

Country of origin: Canada

Ticker: KIN

ICO Dates: 12-26 September 2017 (Token Event Finished)

Hard Cap: $75 million

Funds raised: 168,732 ETH

Industry: Social media

Funds accepted: Ethereum

My Rating: 4/5

Kin Social Media

Kin by Kik Overview

The Kin white paper starts with the observation that in the past century, communication technologies have grown exponentially. The next step would be to tie up economic value to that growth. And since the parent company, Kik, is already in the business of chat apps, the new token would be used as an in-chat carrier of value.

Kin wants to disrupt the advertisement-based system for monetizing content, which has created monopolies and affects user experience poorly. The project also notes the potential for the building of communities around a cryptocurrency based on the sharing of values and an understanding of the technology.

The Kin project wants to build such a community and create a digital economy within a chat app. An already existing community would receive a token and presumably, use it for fair exchange of products instead of relying on the “attention economy.”

The Kin Team

It is no surprise that an already established company would have a highly visible and experienced team. The Kin project comes with experts who can focus on the next step, instead of developing the chat app from scratch and hoping to cultivate a community.

The Kin team includes:

About Kin Token

The Kin token started trading recently, but only on the decentralized Ethereum-based exchange EtherDelta. This means that the current market price is formed on very thin volumes, mostly traded by cryptocurrency experts who can deal with the challenges of using EtherDelta.

The Kin token is the heir of the Kik Points, an experimental centralized digital currency released in 2014. Kik wanted to discover how much users would be willing to pay within the app, although without sending in cash.

The Kin token is a pre-mined currency with a large, but fixed total supply. Since the ICO did not sell at the expected rate, some of the remaining KIN tokens, around 30%, were sent in proportionately to users. The maximum supply of KIN tokens is 10 trillion. Only a fraction of the tokens is in circulation, around 765 billion. The current market price is $0.000102. There is still no information on how the token would be used within the chat app.

KIN is an ERC-20 standard Ethereum-based token, which means the chat app would have to communicate with the Ethereum network and find ways of sending tokens fast. This may prove to be a problem, as the Ethereum network has days of attacks and congestion.

Investing in Kin Token: The Pros

Currently, the KIN token is only thinly traded, with 24-hour volumes around $150,000. This is very low for a high-profile ICO. Projects coming in just a few months earlier already managed to get representation at some of the more prominent trading platforms and exchanges for cryptocurrencies, thus securing an inflow of cash.

Listings on Asian exchanges have lifted tokens up to great heights.

Investing in KIN right now may be difficult, due to the nature of the EtherDelta exchange. It is still possible to buy tokens after the ICO, though. The biggest growth potential for the market price would be listings on exchanges such as Bittrex, Poloniex, but also large Asian markets like BitHumb. The ease of purchasing and selling a token adds to its popularity.

The best part about the KIN token is that it can be held by almost anyone. Holding KIN in MyEtherWallet is relatively easy with some learning. Unfortunately, other wallets are not so compatible and there is no native cryptocurrency wallet for holding KIN.

The Risk of Kin

The Kin ICO was a litmus test for the cryptocurrency sector. It was extremely well-publicized and organized to distribute the tokens far and wide. The ICO included a strict Know Your Customer screening, with foreign buyers providing a clear photo image of their face and a scanned passport. Initially, this held some risk for identity theft.

The ICO was also well-protected from a copied site and the company watched out for impostors.

The other problem for the Kin ICO was the regulatory climate in Canada. This time, the Canada-based company closed the token sale for Canadians. The ICO gathered Ethereum from 10,076 individuals from 117 countries, but could not bring investments from its domestic market. This was something of a hit to the image of the token sale, but Kin decided to play safe. While there were no clear indications of trouble with the Canadian regulators, there was also some ambiguity on whether the token would be deemed a security.

The biggest risk is that the KIN ticker would turn into an underpriced tool for speculation. No one knows how the token would be used and distributed, and how much would be locked up in the app. For now, more than 750 billion tokens are moving through the exchange mechanism. Adding more exchanges may mean that large buyers would shed their holdings.

There is also the risk of pump schemes, where investors owning enough Ethereum move in to inflate the price via the KIN/ETH cryptocurrency pair.

But the biggest risk would be that Kin is forgotten and slips into a thinly-traded token. In the short term, this may be the everyday reality for the KIN ticker. There is no knowing if the team is dedicated to listing KIN on many more exchanges, as that would require a lobbying campaign, either from the company or from potential investors. Tickers are offered for voting every few months, and KIN may have a chance to be traded at new places like Binance.

There is a small risk of competition from similar projects. A chat app needs adoption- but there are more chat apps with a link to the Ethereum network cropping up. A smaller-scale project with a similar general idea is the Status Network. However, this project has the huge disadvantage of trying to build a chat app with a small team and a wild bet on finding enough users.

Final Thoughts on Kin by Kik

Like a lot of ICO blockchain projects, the idea is wonderful, but the implementation is riddled with problems. Investing in Kin would be a long-term bet with a great potential payout. But the end of 2017 only marked the early days of the project. No one knows how the app users would warm up to an ERC-20 token and all the related time lags and technical requirements. No one knows what happens if tokens are lost.

The Kin token sale also had unfortunate timing- the earlier summer months saw ICO projects gather funds in minutes, almost without restriction. But Kin struggled to fill its planned soft cap of $100 million as Ethereum holders were becoming skeptical. September also proved to be a difficult month for the world of cryptocurrencies, with ICO restrictions coming from China, and later Korea.

The bad news deflated investment mood, and at the same time, exchanges were becoming overloaded with new tokens. Kin came at a time of “crypto fatigue”.

But the fortunes may change suddenly, depending on how open Kin would become for new investments. As we already said, currently the market price of the token is only defined by advanced and somehow reckless cryptocurrency users on EtherDelta. This exchange is anonymous, decentralized and unregulated. It has also been the target of hacking attacks and tokens have been stolen- so for now, if you hold Kin tokens, consider keeping them safe in a wallet where you hold the private key. If you want to sell them, it is better to wait for an exchange that offers a smoother experience.

The good thing is that the Kin project, with oversight from the Kin foundation, seems to be on the market for the long haul and developments may boost visibility, adoption, and investment.