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Kik Messaging App Reveals Its First Beta Product, Kinit

Canadian messaging application Kik has launched its first beta product called Kinit, which is related to the company’s Kin token, TechCrunch reported July 18. The release follows Kik’s successful initial coin offering (ICO) which raised $100 million.

The ICO for the Kin token concluded in September 2017, having raised almost $100 million from more than 10,000 participants in 117 countries. Initially, the company expected to secure $125 million.

Kinit is a wallet app designed for active user experience, in which users able to earn Kin by completing quizzes surveys, and watching interactive videos. Users can exchange Kin for gift cards from leading brands and retailers, as well as transfer tokens to each other within Kinit. Rod McLeod, Kik’s vice-president of communications commented on the release:

“Kinit is the first publicly available app dedicated to Kin. Our goal with Kinit is to get Kin into more consumers’ hands. It’s a major step towards making crypto truly consumer-friendly through fun and engaging experiences, and we plan to learn and iterate based on real-world user behavior…”

Kin is an ERC20 token based on the Ethereum blockchain for liquidity assurance and is deployed on the Stellar network to increase transaction speeds. According to TechCrunch, the company is spending around $3 million on the development of the token via its KinEcosystem site. The Kinit app is reportedly the first effort to get common users to adopt the tool.

In March, Kik revealed plans to partner with Unity Technologies video gaming company in a move towards mainstream adoption of Kin token through the gaming industry. As a Kik spokesperson told Cointelegraph, the upcoming partnership with Unity will “bring cryptocurrency to millions of gaming developers,” enabling token integration into games with the help of a customized gaming-specific software development kit (SDK) developed by Kik.

At press time, Kin token is trading at $0.000170, with a market capitalization of $128 million, according to Coinmarketcap.

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$3 Million Fund to Create 25 Marketplaces for Kik Messenger's Token

People might just pay money for digital stickers and photos, if it were easier that is.

It’s a contrarian view, but it’s the central idea behind one of last year’s largest initial coin offerings (ICOs), which raised $98 million selling ethereum-based tokens created specifically for the messaging app company Kik.

To jumpstart a digital market around its code, the company announced Tuesday that it’s committing up to $3 million in fiat and crypto to enlist developers in creating up to 25 marketplaces that only use kin, a cryptocurrency valued at roughly $100 million. These marketplaces could be anything from places to buy access to live video chats with a influential YouTubers t0 very rare sticker packs they can use in chats.

As long as its all digital, that’s the kind of market kin wants to foster.

But while the Kik app is a natural place to host such markets, projects don’t have to be built there per se, according to the newly released terms of the Kin Developer Program.

The initiative “financially incentivizes developers to create natively with kin, bringing us closer to our goal of becoming the most used cryptocurrency in the world,” Ted Livingston, CEO of Kik, said in a press release.

Developers have a chance to earn as much as $115,000 provided they meet three key milestones for their app by April 2019. (They have until October 2 to build an app approved to run on its software development kit (SDK), until January to grow it to 10,000 monthly active wallets (MAWs) and until April to grow to 50,000 MAWs).

Each milestone comes with its own reward, with the full amount awarded to projects that hit all three.

Speed of crypto

The fund’s roadmap is slated to move ahead just as quickly.

According to the Kin Ecosystem Foundation, the non-profit that oversees kin, the deadline for developers to apply to participate is August 10. (The organization has committed to notifying applicants of its decision by August 15.)

A spokesman for the foundation confirmed that these payments will be in lieu of payments from the Kin Rewards Engine (KRE), which is not yet live. (In the original vision for the cryptocurrency, developers would create marketplaces, and smart contracts would reward them periodically in newly released kin tokens based on the amount of activity that took place).

Rather than wait for the KRE to be ready, though, the foundation is providing a different incentive system in the meantime, though it’s arguably just as in line with the project’s vision.

During a conference for the token in April, Livingston described a vision for an ecosystem of marketplaces for purely digital goods in which regular people could both earn and spend kin without ever thinking about converting it fiat.

At the time, he said he saw it as the only viable way forward for his company as Facebook and Google consumed the ad-driven app market, adding: “Our new plan was to develop a new economy around a new currency.”

Still, Livingston has repeatedly said kin needs to achieve three things to succeed. First, it needed a scaleable blockchain (which it believes it has built by forking Stellar) to integrate the Kik app with kin (which it announced late last month). Next, it needed to grow its ecosystem.

This effort to recruit independent developers fits into that last goal. The foundation has promised to mentor and support developers throughout the six-month process.

Marbles via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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Chat App Kik Launches 'Crypto-Economy' With Kin Token Integration

Messaging app Kik’s users can now begin earning and spending the cryptocurrency kin with the launch of its “crypto-economy,” the company announced Wednesday.

According to Kik, a limited number of users will be able to earn kin tokens in the Kin Marketplace Beta by taking quizzes, working on tutorials and answering polls, according to a press release. These tokens can, in turn, be used to purchase premium themes for the Kik app.

Kik is also rolling out free customization tools, including themes, for the app in response to user feedback, the company announced.

Product manager Laura Newton wrote in a release that Kik “wanted to build Kin into [the] products that people already use on a daily basis.” As such, custom options for its app felt like “the perfect option” given the demand.

She went on to say:

“Real consumer use of cryptocurrency doesn’t exist today, because the technology has yet to be adapted in daily life. We’ve built Kin into products that Kik users already use and have layered this experience in a simple and seamless way. Kin will continue to be a pillar of Kik’s product strategy, and we will deepen the functionality of Kin in Kik, providing other partners with a clear example of how to launch their own Kin economy in their apps.”

The marketplace will feature the first transaction run on kin’s blockchain, she said. Users included in the test can access the marketplace through the app.

Kin notably operates on its own blockchain, which it forked off the stellar mainnet earlier this year. The Kin Foundation announced it would be able to offer zero-fee transactions by using its own unique network, the company told CoinDesk.

That move came just months after Kin announced it would be running on both the ethereum network, on which it was originally built, and the stellar network, where it planned to move to late last year.

Kik app image by Annaliese Milano for CoinDesk

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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A Chain of Its Own: Mobile App Kik to Fork Stellar for Fee-Free Blockchain

The cryptocurrency that will soon help power the popular Kik messaging app is making a big technology shift — again.

Kik’s crypto token, kin, currently exists as an ethereum-based ERC-20 token, yet CoinDesk recently reported that’d the company would be moving to a two-chain system whereby its tokens were supported on both the ethereum blockchain and the stellar blockchain. But today, the Kin Foundation, the non-profit organization managing the development of kin, has announced another move, deciding instead to fork stellar to create its own blockchain.

While Kik had first envisioned the two-chain system because it worried about transaction fees on ethereum – a blockchain that pushed up against its scale when the crypto-collectable cat game, CryptoKitties, went viral – Kik has decided that even stellar’s minimal fees were too much for what the company hopes to accomplish.

For its kin token, the problem with stellar is that it costs a tiny amount to make a transaction on that blockchain, and that has to be paid in lumens, stellar’s native cryptocurrency.

Whereas on Kik’s own blockchain, transactions won’t cost anything.

This is especially important given Kik’s goal for its cryptocurrency – to facilitate micropayments, as small as a penny or even less, across the internet more efficiently. The theory is that, if these seamless transactions are possible, entrepreneurs will start creating new digital services that encourage transactions between users for things like inexpensive private chats, digital gifts (like stickers or gifs), personalized photos and more.

Speaking to CoinDesk about the decision, Kik CEO Ted Livingston told CoinDesk:

“I think what makes Kin unique is it’s one of the very few projects where product is driving the technology and not vice versa.”

To encourage entrepreneurs to create these services on the Kik app, the Kin Foundation has a giant pool of kin in reserve that it will use to automatically pay entrepreneurs for fostering economic activity, called the Kin Rewards Engine (KRE). The KRE will pay out a share of kin every day, rewarding each app based on how much economic activity it generated that day.

According to the announcement Tuesday, all that activity will now take place on kin’s blockchain.

Yet, ethereum will still be involved. When a founder has earned enough kin that they want to hold, the idea is they could use a technique called atomic swaps to move their kin over to ethereum. In short, every kin token will exist on two ledgers: one on the ethereum blockchain and one on the kin blockchain.

When its kin half is in a user’s wallet, the ethereum half is locked up in a smart contract, and vice versa.

But while this is the roadmap today, Livingston won’t hazard a guess about when this system will officially go live. Although, the company is currently moving forward with building its own open-source codebase, cloned from the stellar protocol and, as Livingston put it, “taking destiny into our own hands.”

Federated nodes, zero fees

While Livingston remains bullish on stellar, having evaluated other blockchains as he looked for workable solutions, stellar still wasn’t exactly the right fit for Kik.

“It wasn’t that the fees were too high, it’s that they cost something and that created an incentive for spammers,” he said.

While originally, the team had thought it could just subsidize the transaction fees, they soon realized that it would have to put lumens in people’s wallets to do that. As such, they theorized that bad actors could then just create a bunch of wallets and scrape up the lumens, in an effort to secure enough money to make an impact on the network.

As such, Kik has created a fee-less proprietary blockchain, and have done so with the use of established, permissioned nodes.

“When you look at the Stellar network and compare it with Kin’s fork of Stellar, the two networks are identical, with one exception: the people running the federation nodes,” Livingston said.

For instance, the Kin Foundation will run the first node, but Livingston said, that as the company brings on more partners, those partners will be expected to run trusted nodes, too. As such, even though the Kin Foundation will initially control the blockchain, because all nodes will be treated equal, eventually the foundation’s voting power over the network will diminish.

Unlike nodes in the stellar federation, these partners won’t earn anything for validating transactions (if they did, there would need to be a transaction fee). But Livingston believes future kin nodes will be run by the large services driving the kin economy, the ones that earn a lot of income through the KRE, so have a strong interest in seeing the value of kin grow steadily and as such, will volunteer as nodes.

“As more digital services come on board, and as the Kin ecosystem gets bigger and the consumer base gets bigger, there’s more incentive for more people to run these federated nodes,” Livingston said.

This move, while trading off some decentralization for high throughput, aligns with what some industry analysts, including Blockchain Capital’s Spencer Bogart, have predicted as a forthcoming trend. Bogart worries that these systems will become not innovative blockchain systems but ones that resemble the current centralized systems we have today.

But Livingston argues that difference is trustlessness.

“If this is going to be a common currency between billions of consumers across thousands of digital communities, we need it to be trustless,” he said, adding that consumers can rest assured that it isn’t possible for any one entity on the network to take their cryptocurrency from them.

But censorship resistance?

Yet, what could suffer in this federated node model is cryptocurrency’s first raison d’etre – censorship resistance.

For instance, if the kin token ran on stellar, validation would be separate from use cases. Validators would earn income from securing the network, and companies building services to use kin would have paid those validators in fees for use of the network. But under Kin’s new vision, the larger companies driving the public facing use cases will also provide back-end validation.

And those will be companies who could collectively decide, for example, to ban a service viewed as offensive or malicious from using the network (in other words, to censor it).

Think of it like this: imagine that the internet today were built in a similar way to the kin blockchain. The big nodes – services probably like Ebay, Etsy, Vimeo and others that successfully encourage people to spend money with each other – could get together and decide to block a site’s transactions that they or their users think is offensive.

Would the stellar nodes made up of largely unknown back-end internet services companies cave to collective social pressure before a bunch of companies with widespread name recognition and a large base of consumer users decide to act as dictator?

Knowing that the latter is probably more likely, this is what many crypto enthusiasts want to guard against through the use of decentralized cryptocurrency protocols.

It’s a question Livingston has grappled with, but contends it’s an exception that maybe isn’t as bad as it sounds.

“The question is less about the terrible stuff of the world. That’s stuff we’re all going to have to grapple with as a global society,” he said, adding, “The question is more about centralized powerCould Kin become a centralized authority in the kin ecosystem? And we want the answer to that to be no.”

Governance, Livingston continued, is one of the most interesting topics in cryptocurrency right now, and the team behind kin is thinking about all these problems actively.

He concluded:

“I think the really exciting thing from an engineering point of view is kin is at the bleeding edge of solving these blockchain challenges and leading the industry there.”

Bike chain image via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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Kindred Spirits: Why Hardcore Early Adopters Are Dead-Set on Kik's ICO

“I’m long-term bullish and short term I have no idea.”

That’s how Fred Wilson, a partner at Union Square Ventures and one of the most widely respected VCs working today, answered a question about the crypto market in general and specifically his outlook for Kin, the soon-to-be launched token created by the messaging app, Kik.

Wilson made the comment in a small event space on Prince Street in Manhattan, sitting in front of 28 people that Kik had flown in from 13 countries (including Japan, India and Australia), and all of whom seemed to be holders of Kik’s ethereum and stellar token.

Kik had brought them together to serve as the first wave of ambassadors for the new token, serving on Reddit, Telegram, Kik groups and anywhere people might want to talk about it.

So, when Wilson expressed that mix of confidence and uncertainty, he wasn’t just giving the latest market’s hot take; he aligned himself with a prevailing sentiment in the room, hope mixed with some confusion. A part of his role there seemed to be to induct Kik’s guests into an ever-widening circle of the true believers backing the new model for monetizing digital experiences enabled by kin.

“I wouldn’t say it was my idea, but I would way I was one of a group of people who collaborated on coming up with it,” Wilson told the room. “Obviously, I think it’s a great idea.”

Wilson spoke during the last fireside chat of the day, in conversation with CoinFund CEO Jake Brukhman.

CoinDesk had been invited to the event to interview Kik CEO Ted Livingston as the the two day event opened. During that conversation, Livingston described himself as a wreck two years ago, as the company lost marketshare to Facebook-owned products.

In Wilson’s telling, he helped bring his fellow investors in the company around to a crypto-led strategy, so that now Livingston could say:

“Our investors are very supportive, but it took us a while to get there.”

Faced with what he saw as the impossibility of monetizing a messaging app with ads amidst the Facebook-Google advertising duopoly, Livingston elaborated, “Our new plan was to develop a new economy around a new currency.”

An economy is, of course, one form a community takes, which helps to explain why Kik has invested in forging bonds between its early advocates, expanding the cadre from that early circle that sold the Kik board to a larger one that can sell lots of people using services online.

Here’s the funny thing about it’s early advocates, though: by and large, they don’t use Kik. During our interview with Livingston, we asked the crowd whether or not they were big Kik users before Kin came along. Only five or six raised their hand.

It’s remarkable because when Kik first unveiled this idea, many people viewed its existing audience as its unfair advantage over potential social crypto competitors.

Livingston volunteered, “Our users of Kik are largely unaware.”

Crypto Summer Camp

Arriving at the gathering on Prince Street felt a little like coming back to summer camp, with lots of people chatting with that peculiar spirit of reunion. Only it wasn’t a reunion – these people hadn’t met face-to-face before, they had spent a lot of time talking online.

And it was clear that certain levels of rapport had been established. This particular hit home during the (not really necessary) ice-breaking round when one community member in particular introduced himself. “Hi, I’m Dillon,” Baltimore’s Dillon King said. Everyone broke into applause. “And I don’t actually look like Yoda.”

Later we would learn that King is one of the most active voices on kin’s Telegram and Reddit channels. “I kind of play the role of the educator,” he told CoinDesk.

King was dressed like a lot of the guys at the gathering (it was very nearly all men), in a purple t-shirt and a black-zippered hoodie, apparently in tribute to Livingston, who wears those two things nearly every day. He said was glad to finally get to meet people from the Kik staff in a setting where they didn’t have to constantly speak as if cameras were rolling he said.

“In general I just wanted to meet everybody,” he explained.

We have known for a long time that people can build real bonds and relationships online as well as offline, but there’s other ways in which online life is not as much like the real world as it could be. And that’s the impetus behind kin: deepening digital reality.

“We want mainstream consumers to use cryptocurrency and we think the hardest problem with that is setting up a system, setting up an economy, in a place where they would actually use it,” Livingston told the room. That place is the internet, buying and selling for purely digital goods and services.

Livingston said they had focused on picking ambassadors who understood that there was a real opportunity in creating entirely digital markets. In fact, he took it so far that he said he hopes to see such robust digital markets that people quit thinking in kin-dollar or kin-yen terms, and instead thinking fiat terms in real life and kin terms online.

Just like people don’t think about exchange rates when they buy lunch from the corner burrito place.

As we spoke to ambassadors on the floor, it was clear that they still had questions about how a stable economy could rest on unstable crypto. “There’s things I don’t understand,” Australia’s Will Gikandi told CoinDesk.

Gikandi took advantage of every Q&A to pepper each speaker with questions. It was clear that he wants to believe it could all work, but he still doesn’t quite see how.

The money

Probably the biggest applause line of the whole day came when Livingston said:

“I’m not in this for a money, though I do think kin is going to be very valuable.”

It helps here to step back and revisit what Livingston believes is so big about the kin idea. He saw himself surrounded by peer companies that had successfully built communities but couldn’t make money. The idea of kin is to create a way for all those companies to monetize without ads or user fees.

Livingston describes that economy as having two pieces: a cryptocurrency and a software platform that can reward developers for creating active markets for that cryptocurrency.

The strangest part of this whole kin idea is that second part, called the Kin Rewards Engine (KRE), controlled by the non-profit Kin Foundation. The idea is that developers will try to build apps that encourage users to exchange kin with each other.

“We don’t want developers to charge consumers,” Livingston said. “We want to set up is what we call a consumer-to-consumer economy.”

So, someone might build an app where users send artists photos and pay them in kin to make drawings of them. The artist would keep all her earnings, but the KRE (which holds 60 percent of the kin that will ever be created) would pay the app’s developer every day relative to the amount of economic activity it created within the whole kin economy.

Wilson said that there’s lots of companies in his portfolio who would probably benefit from jumping on the KRE once its built, but he thinks there’s more opportunity with developers just having their first glimmer of an app idea now.

That said, USV is so convinced that in the future tech companies will earn so much in tokens that its begun negotiating what it calls “token exchange agreements” with the companies it backs. In these agreements, it would have the option to exchange its equity for tokens a company has earned from doing business (not what they generated by issuing them in an ICO).

One member of the audience wanted to know when developers could begin building business models around the KRE?

Livingston wouldn’t commit, but he did give his interlocutor a standard by which to hold him accountable. There’s three ways Kik has to lead, he argued. It has to have a blockchain that can support a million users, it has to have lots of regular consumers actually earning and spending in crypto and it has to have a functional incentives system (like the KRE).

If any other company starts to show traction in any of those three areas, that’s when kin backers should start getting angry.

“Who’s in first place. We have no idea. Nobody knows,” Livingston said, concluding:

“The race hasn’t even started yet.”

Photo of Ted Livingston welcoming kin supporters courtesy of Kik.

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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Rockefeller’s VC Arm Venrock Partners With Coinfund, Exec Highlights Focus On Long Term

Venrock, the official venture capital arm of the Rockefeller family, has partnered with crypto investment group Coinfund to support cryptocurrency and Blockchain business innovation, Fortune reported April 6.

Coinfund has recently added token-based financial services platform Coinlist, a spinoff of startup connection website AngelList, to the number of projects that it backs. Coinfund is also known for backing chat messenger app Kik, which raised almost $100 mln in the Initial Coin Offering (ICO) of its Kin token last fall. Fortune notes that Venrock and Coinfund met through their mutual investment in the live video streaming app maker YouNow.

When asked about Bitcoin’s (BTC) recent failure to strongly stay above $7,000, Venrock partner David Pakman told Fortune that the price of “a single currency over the next day, week, month, year” is not what they thought about when deciding to partner with a crypto investment group:

“We’re really patient long term investors […] we’re wondering what happens over the next five to ten years. Can we have fundamental change to a number of different markets because of a disturbed ledger, a token economy that all participants can take part in?”

According to an April 6 blog post by Pakman, cryptocurrency and Blockchain’s most important innovation is their creation of “the possibility of building sustainable decentralized computing platforms, services and apps”, writing:

“It may finally be possible to build widely-distributed networks without centralized trust or control, and to allow user consensus to govern their future […] In this scenario, ‘commodity’ applications like messaging, social media and application infrastructure like file storage and compute become very much like public utilities — and they are owned and governed by their participants. For many of us, this is the mission behind crypto.”

When asked by Fortune about the potential for scams running ICOs, specifically mentioning the recent news of the Centra-related arrests, Pakman referred to the crypto ecosystem as a “wild space up and down the whole stack,” with ICOs as “certainly one of the most wild spaces of it all.”

Pakman added that he supports regulations of the crypto sphere in order to clear out the “bad actors,” but that one needs to be careful not to “throw the baby out with the bathwater here”.

Pakman also noted that decentralized systems could eventually be a competitor to traditional venture capital fundraising, which he referred to as “effectively a gatekeeper industry” that he would “actually like to see undone”, adding:

“I don’t believe that a small group of people should make the decisions about which projects can raise some money and get off the ground.”

Coinfund co-founder Jake Brukhman told Fortune that Coinfund will be “working closely with [Venrock] to help mentor, advise, and support teams in the space.”

Major traditional investor George Soros, who had previously referred to Bitcoin as a “bubble,” will also reportedly be investing in cryptocurrencies, through the Soros Fund Management. In mid-February, Soros’s investment fund become the number three shareholder in Overstock, a retail company that accepts Bitcoin as payment and whose CEO Patrick Byrne is widely known for his pro-crypto stance.

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Game Giant Unity to Work With Kik's ICO Token

The Kin Foundation wants video game developers to help take the kin cryptocurrency mainstream – and it has just scored the assistance of industry giant Unity Technologies.

Unity is the maker of a popular game engine that can be used by other developers. Popular games built on Unity include Cuphead, Pokémon Go and Kerbal Space Program, among numerous others.

The company is the first participant in kin’s “decentralized ecosystem for digital services and applications.” Created by messaging app firm Kik, the initial coin offering of the kin token garnered $98 million last year.

The foundation will work with Unity to develop a gaming-specific software development kit (SDK) that will allow millions of Unity developers to integrate kin – hosted on both the ethereum and stellar blockchains – into their designs, it announced on Thursday.

“The SDK will allow all game developers to design with kin and blockchain technology at the core,” Dany Fishel, EVP of Partnerships at Kin, told CoinDesk in an interview.

In practical terms, this means that the team will introduce a wallet and a marketplace for developers, Fishel explained. After emerging from its beta stage, the SDK will be open sourced and available in the Unity Asset store, as well as shared on GitHub.

The foundation intends for the kit to “bring monetization tools to developers,” and will facilitate three particular use cases – the first of which is peer-to-peer value exchange in mobile games. For example, Fishel said, players could “reward one another for the knowledge they can share” about unlocking game levels or other features.

Gamer push

The SDK is also intended to enable developers to reward users for “being good citizens of the apps” by reporting bugs or providing feedback.

Likewise, the kit would provide another means of monetization by allowing brands to interact with players by rewarding them for completing surveys.

Fishel also spoke to why the foundation sees the gaming industry as an ideal foundational participant for the kin ecosystem.

“Gamers in general already have a strong understanding of digital currency to being with,” he explained. “Game developers are the first ones to adopt technologies, they are the first ones to adopt innovation. So we see them specifically as a very natural audience to endorse a cryptocurrency.”

Fishel added that that the integration of kin into the gaming world is just the beginning of the creation of a larger ecosystem. While developers will provide the cryptocurrency within the context of a game, users will eventually be able to spend it outside the game as more partners come onboard.

Although Fishel was unable to reveal who the next partners will be, he told CoinDesk to anticipate collaborations with “community-driven apps that will provide great ways to earn and spend for users,” to be announced within the coming weeks.

Kik app image via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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Ethereum and Stellar? Kik's Kin Token to Use Two Chains

One crypto token on two different blockchains?

While it might sound unlikely, social messaging app Kik has announced it’ll be doing just that with its “kin” token, which allowed the company to raise $98 million in an initial coin offering (ICO) in September. After some back and forth about which blockchain the company wanted to host its crypto token on, Kik has decided to use ethereum (on which the tokens were first launched) for liquidity and stellar for transactions.

The decision comes only a few months after CoinDesk reported that Kik was thinking about moving its crypto token fully off ethereum and onto stellar due to high transaction fees and slow confirmation times plaguing the ethereum network.

At the time, Kik CEO Ted Livingston referred to the ethereum as “the dial-up era of blockchain,” but today the company has pulled back a bit from its complaints about the second largest blockchain by market capitalization.

As such, users can imagine their kin token being split into two equal parts – one that runs on stellar and one that runs on ethereum. Using atomic swaps, an in-progress technology that allows cryptocurrencies to be traded across blockchains, the company will lock up a kin token’s stellar half when its ERC-20 (the ethereum standard for crypto tokens) half leaves the app, and vice versa.

“Creating a bi-directional blockchain with stellar will drive mass adoption of kin by providing faster confirmation times, low transaction fees and scalability,” Livingston said in a press release.

Stellar founder Jed McCaleb seconded that, telling CoinDesk:

“Kik will be one of the first mainstream projects that uses cryptocurrencies in a meaningful way. It will bring millions more people to this technology and we are super excited to be the platform this will be done on.”

As previously reported, Kik saw participation from 10,000 people in 117 countries in its token sale. By popularity, the messaging app ranks No. 15 on Mac iOS in the social networking category and No. 14 on Android in the communication category, according to SimilarWeb, a third-party app usage tracker.

For Kik, the crypto token is about allowing users of its platform to purchase digital goods and in the future, even physical goods more easily, and according to many industry stakeholders, the launch of kin will be an early test of whether this pans out.

“Users that have a medium of exchange do have a better user experience overall,” Tanner Philp, director of corporate development at Kik, said. 

Lock it down

To make this two blockchain system work, Kik is employing atomic swaps, a technology that’s been a hot topic this year as developers look for ways to make it easier for users to trade tokens across blockchains.

The technology involves basically locking tokens on one network and creating tokens on the other. As such, every ERC-20 kin token – the total supply is 10 trillion tokens – that Kik created in its ICO will have a corresponding stellar token.

If some of those ERC-20 kin tokens never make it to the Kin app, the equivalent amount of stellar kin tokens will never be unlocked, either. In that way, the new stellar tokens should not have an effect on kin’s price.

Yet, committed to using whichever blockchain is the best, Philp said, kin could be moved fully back onto the ethereum blockchain should the protocol scale up.

He told CoinDesk:

“There’s the flexibility to use the best protocol that’s available.”

But at this point, according to McCaleb, the stellar protocol was specifically designed to represent non-native assets and conduct exchanges with other protocols, “so it is super fast and efficient.” Plus, stellar is in the middle of implementing Lightning Network, which moves transactions into payment channels off-chain and is touted as a way to scale blockchains without increasing the burden or fees.

Yet, both Philp and McCaleb said current demand for kin transactions – a report from January showed that 18,000 crypto transactions were made (either through earning kin through surveys or spending it on sticker packs) during the initial product tests – should be no problem for Stellar to handle as it’s built today.

Beyond stickers

As mentioned, currently select Kik users can earn and spend kin tokens, the latter only on sticker packs or digital art that people can use within chats, so far.

But Kik expects more digital and even physical content will be available in the future. For instance, eventually, there could be games, private chats and/or collectable digital art (along the lines of CryptoKitties). And on the physical goods side, sunglasses manufacturer Shivas announced in February that it would accept kin as payment.

Although, scaling challenges have prevented Kik itself from developing more complex applications for the token so far.

While Kik’s crypto token wallet is available for use, it doesn’t activate beyond a preview until kin is loaded into it for the first time. According to Philp, the company has opted not to draw too much attention to the new feature as it works through technical limitations.

Still, Philp said, “We’re going to continue to develop more experiences on the platform to act as a lighthouse.”

Kik has committed to complete integration by the second or third quarter of 2018. The integration will take place in two phases. Soon, 900 billion stellar-based kin tokens will go live that Kik users can earn and spend, then during the second phase, users will be able to move those stellar kin tokens off the Kik app to create ERC-20 kin tokens, which can be traded on secondary markets for other cryptocurrencies and crypto tokens.

Summing up his thoughts on what kin tokens will eventually provide for the messaging app, Philp concluded:

“Overall we see that Kin is a great force multiplier as a strong product experience for users in these experience driven digital service.”

Kik app image via Shutterstock

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Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Please conduct your own thorough research before investing in any cryptocurrency.

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Crypto's Biggest ICOs Stay Silent on SEC Subpoenas

The silence is deafening.

After rumors began to fly late last week that the SEC has been sending out subpoenas to initial coin offerings (ICOs), some of the biggest projects to yet utilize the funding mechanism have remained tight-lipped, refraining from public commentary.

CoinDesk has so far reached out to the 14 best-known issuers that have raised $50 million or more through their token sales, asking whether they had received a subpoena or request for information letter. The majority left multiple requests for comment without a reply.

Few attorneys or industry stakeholders are willing to talk on the record about the investigations as well. Although many have said they believe the agency is undertaking a sweep of the industry, one that could be focused on a particular type of token sale.

Only one person has admitted to receiving a subpoena, TechCrunch founder Michael Arrington, who raised $100 million to start crypto hedge fund, Arrington XRP Capital.

That said, over the course of a week, CoinDesk has repeatedly asked each project if they have received subpoenas. Statements, and even the absence of statements, from these issuers can be somewhat illuminating.

Direct answers

Of the 14 projects CoinDesk reached out to, only one directly answered questions regarding SEC subpoenas: Quoine.

A spokesperson for the issuer, which raised $108 million through the sale of its Qash token, said it had not been subject to a subpoena or a request for information.

While Bancor, which raised $153 million selling its BNT tokens, a spokesperson indicated it had “nothing to report” to CoinDesk, suggesting it had not received a subpoena.

And Overstock.com subsidiary tZero, which is still in the midst of its token raise targeting $250 million, confirmed that it is under investigation by the SEC, but did not receive a subpoena.

Instead, tZero said, it was “willingly working” with the SEC.

Kind of comments

Other than that, several issuers responded to CoinDesk with the infamous “no comment” comment.

TenX, which raised $80 million during its token sale, declined to comment via a spokesperson and so did Kik, which raised $98 million in its Kin token sale.

Kik’s corporate development director, Tanner Philp, even sidestepped a question during the Blockchain for Business conference in Toronto on the subject, saying regulators are “really trying to wrap their head around this whole ecosystem.”

He continued:

“Kik as well as many others in the ecosystem are trying to be as collaborative as possible throughout this process, and are having active conversations with many people across the globe.”

Nabil Naghdy, the COO of Status, which raised $107 million for its Status Network Token, similarly dodged directly answering questions about receiving a subpoena.

Instead, Naghdy said, “When we started with this technology there was more uncertainty than there is today, we had a duty to set high standards and narrow the scope of our offering, i.e. excluding the U.S. There are many projects that don’t respect the technology, and a balanced regulatory body can protect consumers while enabling innovation.”

Brendan Blumer, CEO of Block.one, whose token sale for EOS is ongoing, with current estimates at $700 million, also said the company’s token wasn’t offered in the U.S. but did not respond directly about a subpoena.

And high-profile token issuer, Protocol Labs Founder Juan Benet, whose company raised $257 million from its Filecoin token sale, told CoinDesk, “As a policy, we do not comment on legal questions that we have not explicitly decided to comment on beforehand. This is not specific to SEC, it’s very broad and comes from our legal team’s policies.”

Crickets

And that’s it. The rest of the issuers CoinDesk contacted did not respond to multiple requests for comment.

Those issuers included: Blockstack, which raised $50 million for its stax token; Opskins, which raised $68 million for its wax token; GameCredits, which raised $53 million for its mobilego token; Polkadot, which raised $145 million for its dot token; Sirin Labs, which raised $157 million for its srn token; and Tezos, which raised $232 million for its tezzie token.

According to Carol Van Cleef, CEO of decentralized technology solutions startup Luminous and a long-time crypto-interested attorney, “Depending upon the nature of subpoena, they may or may not be at liberty to disclose that they received it.”

Although, since Arrington’s admission, it’s clear that not all the SEC subpoenas issued to ICO stakeholders have gag orders attached.

“The choice of whether to disclose a subpoena is a matter of company policy,” Van Cleef said, adding:

“Depending upon the circumstances, it may be indicative of sensitive issues, but it also doesn’t have to be an indication of issues for concern.”

Additional reporting by Marc Hochstein and Bailey Reutzel.

Disclosure: CoinDesk is a subsidiary of Digital Currency Group, which has an ownership stake in Protocol Labs. 

Gong image via Shutterstock

The leader in blockchain news, CoinDesk is an independent media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. Interested in offering your expertise or insights to our reporting? Contact us at news@coindesk.com.

Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Please conduct your own thorough research before investing in any cryptocurrency.

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Goodbye Ethereum: Kik Plans to Move Its ICO Tokens to Stellar

Mobile messaging startup Kik is planning to shift its Kin token network from ethereum to Stellar, CEO Ted Livingston confirmed on Wednesday.

Speaking in a live question-and-answer session on YouTube, the company’s founder argued that ethereum’s blockchain – which the app is presently based on – is unable to scale to the level that Kin needs, among other issues. The answer, he said, is to shift to the Stellar network, which was first unveiled in 2014 and created by Ripple co-founder Jed McCaleb.

Livingston went as far as to blast ethereum as “the dial-up era of blockchain,” noting that gas prices – which are needed to execute computations – and other transaction fees need to be built into the app to ensure users’ transactions go through. Kik first announced it was contemplating moving onto another blockchain in October, stating that ethereum’s scaling issues meant it “might not be the right solution” at the time.

In Wednesday’s video, Livingston said Kin was pushing the limits of what ethereum could handle with its roughly 10,000 users. The network’s reliability is another factor in the planned move, he said, pointing to recent network congestion as a result of the popular CryptoKitties app.

Livingston explained in the video:

“Stellar was built by the guys at Ripple and the thing we like about it is it’s custom-built for an application like Kin. It’s not like ethereum where it’s trying to be everything to everybody, and that makes it general-purpose and slow.”

Over the next few weeks, Kik will test Stellar’s scalability and reliability, according to Livingston.

“It’s very focused on what it’s trying to solve for: fast, reliable and inexpensive transactions for a lot of people,” he said.

A Kik spokesperson told CoinDesk that a limited number of users would begin using the app by the end of December, which represents somewhat of a delay due to the CryptoKitties congestion.

Assuming the tests are successful, Livingston said he foresees a second-quarter rollout of the app, built on Stellar, to all users.

Brady Dale contributed reporting.

Image Credit: nukeaf / Shutterstock.com

The leader in blockchain news, CoinDesk is an independent media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. Have breaking news or a story tip to send to our journalists? Contact us at news@coindesk.com.