Using a high-speed, high-scale blockchain is key to making Kin the ideal cryptocurrency for everyday use. Welcoming Stellar into Kin’s infrastructure is a huge step forward in Kin’s functionality and accessibility for digital services.

Up to now, all Kin transactions have taken place on Ethereum (ERC20). Moving forward, Kin transactions will be performed on Ethereum or Stellar. As Ted discussed in a recent AMA, the two blockchains will support Kin in different ways — with services operating on the blockchain that is best suited to their needs.

While Ethereum provides liquidity for Kin holders, its load times and fees can’t support our needs for day-to-day consumer use. The addition of Stellar as a second blockchain will allow us to operate the Kin Ecosystem on a faster, more efficient foundation, with low transaction fees — which is necessary for us to achieve the speed and scalability that digital services in the ecosystem will require.

Now that our relationship with Stellar is in place, we want to share more information on our “bi-directional” migration plan for Kin tokens.

In practice, the plan is less like a migration than like a software update: because Kin will run side-by-side on both Ethereum and Stellar, participants won’t need to move their tokens away from Ethereum if they don’t want to (and user experience with ERC20 won’t be impacted).

The change will simply create a more frictionless experience for using Kin. As our two-phase plan (below) explains, participants in the Kin Ecosystem will always be using the same Kin token — whether on Ethereum or Stellar — just on a different underlying infrastructure.

Here’s how our two-phase plan will work.

Current Status

Under the terms outlined in the the Kin whitepaper, a total supply of 10 trillion Kin will be issued over time (with no additional surplus to ever be minted).

Today, all Kin tokens in circulation exist as ERC20 tokens on Ethereum. (Some are held by TDE participants or people who bought Kin afterwards, some by Kik or by the Kin Ecosystem Foundation, some by Kik IPLv2 users, and so on.)

From now on, let’s label these original ERC20 tokens as Kin1.

As we integrate Stellar as a second blockchain solution, we’re deploying a new set of Kin2 tokens onto Stellar in a manner that does not impact any participant’s financial stake in the Kin Ecosystem.

Phase 1 (Immediate)

In Phase 1, the Stellar-based Kin2 tokens will not have any financial value. During this current phase Kin2 acts as a so-called “unit of account” for Kin1 tokens in the Kin Ecosystem.

Initially, we will create a set number of Kin2 tokens — likely 900 billion — on Stellar. These Kin2 tokens will be completely new, separate, and different assets from the Kin1 tokens created in the TDE, so they will not affect the value of Kin1 tokens.

— on Stellar. These Kin2 tokens will be completely new, separate, and different assets from the Kin1 tokens created in the TDE, so they will not affect the value of Kin1 tokens. Digital services companies will be welcomed into the Kin Ecosystem to experiment with these Kin2 tokens in a similar manner to Kik Points: Their end users will be able to earn Kin2 tokens and/or spend Kin2 tokens (depending on how the digital services develop experiences).

Kin2 tokens will only be awarded by the Kin Foundation for use in ‘Earn’ or ‘Spend’ experiences on the Stellar network. Users will not be able to trade Kin2 tokens directly in Phase 1, nor exchange them for other cryptocurrencies.

In Phase 2 (described below), Kin2 will be merged with the original Kin1 to create one unified token over both networks. Only this future action will give value to Kin2. In Phase 1, they are completely separate and Kin2 does not have any value.

Phase 2 (Q2-Q3 2018)

In Phase 2, Kin1 and Kin2 will be directly tied together — creating a more seamless experience while maintaining the integrity of the allocation schedule.

We will develop a mechanism to create a Kin1/Kin2 hybrid similar in concept to the hybrid transaction service we discuss in the Kin whitepaper.

Once the mechanism is deployed, Kin1 and Kin2 will not be separate tokens, but rather the same token implemented over two blockchains for different purposes:

For internal use inside a single digital service, users will use Kin2.

For external use or transactions between digital services (and/or for exchange purposes) users will use Kin1.

We will force a 1:1 conversion ratio between Kin1 and Kin2 in order to ensure that Kin1 and Kin2 have one aligned value and that the total number Kin1+Kin2 tokens in circulation will never be more than 10 trillion .

. Our development in this phase will also provide a way for tokenholders to swap between Kin1 and Kin2 tokens. Conceptually, it will work as a “lock-and-swap” mechanism: Locking a given number of Kin1 tokens will unlock the same number of Kin2 tokens; locking Kin2 tokens will unlock that same number of Kin1 tokens.

Before launching the Kin1/Kin2 hybrid, we will lock 900 billion Kin1 tokens (held by Kik or the Kin Foundation) without swapping them to Kin2. This will account for the 900 billion Kin2 tokens created in Phase 1 and maintain the maximum 10 trillion Kin1+Kin2 tokens per the TDE. Then we launch the hybrid!

Key Considerations

This a complicated process on our end, so we want to be as transparent about it as possible. We’ll provide more details in coming weeks and share thorough updates throughout the process.

In Phase 2, we’ll also provide end-to-end information on wallet compatibility, exchanges, and how to swap Kin1 and Kin2 tokens between blockchains.

For now, here are some answers to your most pressing questions. For a full FAQ, click here.

When will this happen? How much time will it take?

We plan to roll out the initial Kin2 tokens at the beginning of Q2. The swap mechanism will be complex to develop — likely requiring at least a few months of development work. That means the “hybridized,” swap-able Kin1/Kin2 tokens will not exist until Q3 2018, at the earliest.

What assurances are there that Kin will remain liquid?

Since we are simply adding another optional blockchain in parallel, liquidity should not be impacted negatively by this process. You will not be required to swap your tokens from one blockchain to another at any time and can leave your tokens on Ethereum for as long as you want.

With the vesting contracts on Ethereum today be moved to the new blockchain?

No, any vesting contracts on Ethereum will stay on Ethereum. We don’t see any reason to move them since tokens can remain on Ethereum.

If my tokens are stuck in Mercatox for processing, should I be concerned? Will I lose them in the migration process?

Nope, there’s no need to worry. Since you can leave your tokens on Ethereum, nothing will change for these tokens as they move through processing.

Will you continue development of Ethereum libraries after this?

Yes, but with less emphasis. The addition of Stellar is designed to help us scale on a faster blockchain, so we will focus more efforts on the new infrastructure while making sure that Ethereum still works as expected.

What comes first? The standalone Kin app or the addition of Stellar?