KIN for the WIN
Tags: Kin, Cryptocurrency, Crypto, Cryptocurrency Investment

“My centre is giving way, my right is in retreat; situation excellent. I am attacking.”

Quoting Field Marshall Foch in the Battle of the Marne, Kik/Kin investor Fred Wilson defiantly surveys the field in his blog post “Hard Decisions” after deciding to close Kik, laying off 95% of the staff to focus on Kin.

This was back in September 24, 2019.

Leaving only 19 core members of the Kik team to focus on Kin through their SEC fight, it must have felt grim, but the post reflects his determination.

Of course, a legal win for Kik would have been the hoped for outcome, but if you look at their end goal, the case can be made that Kik won by losing.

Kik CEO Ted Livingston: “After 18 months of working with the SEC the only choice they gave us was to either label Kin a security or fight them in court,” he said. “Becoming a security would kill the usability of any cryptocurrency and set a dangerous precedent for the industry. So with the SEC working to characterize almost all cryptocurrencies as securities we made the decision to step forward and fight.”~ModernConsensus

Kik settled, $5 million of their $100 million in ICO moneys was paid, and as part of their settlement the Kin token was determined to not be a security.

Kin won what they had been seeking, a determination that while the ICO may have been considered an unregistered securities sale, the Kin token was not itself a security, and no longer under the thumb of the SEC.

There are only 2 other cryptos that have this determination: Ethereum, and Bitcoin.

In Fred Wilson’s mind, a venture capitalist founder of Union Square Ventures, a New York City-based venture capital firm with investments in Web 2.0 companies such as Twitter, Tumblr, Foursquare, Zynga, Kickstarter, and Etsy, this so-called loss was easily a win.

Wilson is no silent partner.

While Livingston is the public face of Kin, Wilson lends his capital, guidance, and yes, his determination to make Kin a success.

In his AVC blog, you can tell that Wilson’s focus on Kin is in its utility, something even now that is eye-poppingly lacking in crypto.

“Very few people earn in crypto. Very few spend in crypto. Very few use Dapps. Very few do anything with crypto other than buy, sell, and mostly hold.” ~ Fred Wilson, AVC.com

What Bitcoin Did

Let’s apply Fred’s insight into the reigning crypto champ.

Bitcoin has changed its definition from a “Peer-to-Peer Electronic cash system” to a store of value. Akin more to Gold than cash, if it doesn’t eventually transact its fate may well be a stagnation in usage as well as value.

What about Ethereum?

Defi, Ethereum’s most recent justification for its existence, is currently a shell game of crypto token ratios, providing liquidity in a game of which s̶h̶i̶t̶ altcoin can we pump and dump, not really (yet) an alternative to the financial sector.

None of the token pairs are actual companies, or currencies in use. The liquidity is for traders on the margin, scalping pumps and dumps, with little real value being created.

It’s an ersatz Forex market for currencies with no real world usage.

Show me where you can spend YFI? Sushi? Yam?

Kin Real World Usage

Yet, Kin is a token with 34 Monthly Active Apps, and 2.6 million Monthly Active Spenders. It’s a token with one of the highest usage stats on the planet.

Wilson is making the point that he’s behind Kin, as he was with Etsy, as with Twitter, and Kickstarter, as something with real usage. When you take a stroll down their list of apps, one can see apps for Gaming, Health & Fitness, Communication & Social, News & Entertainment…and the list goes on.

What is interesting is not the apps themselves. What’s interesting is that Kin can be used for any kind of app.

Previously used for the Kik chat app, Kin was designed (unlike Telegram’s Gram/TON) as app agnostic. A token that could be used for anything related to online usage, whether that be a fitness app, a chat app, or news & entertainment.

Anything.

Telegram Partnership?

After Telegram announced defeat, paying back its ICO investors 1.2 Billion dollars, one could be forgiven seeing Telegram as a possible opportunity to uptake Kin as a monetization utility. Unlike any other token, outside of BTC and ETH, the regulatory determination for Kin is clear.

And Telegram would be only a one-of-many possible partnerships.

“…situation excellent. I am attacking.”

Gotta love the French.

General Ferdinand Foch eventually won, by the way, coordinating the French, British and American efforts, stopping the German offensive and launched a war-winning counterattack.

I imagine Livingston and Wilson are now counter-attacking. Finally freed of the SEC legal case that drained resources, and more preciously: time to market; now is the time to strike.

Much has been made of Wilson’s seat on the board of Coinbase as an indication of a soon-to-be-revealed holiday surprise of a Kin Coinbase listing. Fred Wilson is a fervent Kin defender perfectly placed as a board member on the chess board of the major US exchange. He and Ted, and the rest of the Kin community were just waiting for the legal case to be decided, and the move to Solana be done.

Can a Coinbase listing, after the melodramatic years-long SEC court case, be far behind?

The restraint of the SEC

Many see the SEC as the enemy.

But the SEC case could have determined Kin as a security, made Kik return the $100 million ICO funds with interest, and effectively killed off Kin. Instead, Kin settled with a $5 million slap on the wrist, whilst getting the SEC to concede to its demand: determining that Kin was not a security.

That was huge.

Kin achieved that which the likes of Telegram, and Ripple have not: a SEC determination that its token is not a security.

In the face of SEC actions, after the SEC blocked its $1.7 Billion dollar ICO Telegram abandoned its proposed blockchain TON, and Brad Garlinghouse of Ripple was packing his bags because of what he saw as excessive US regulations.

Meanwhile, Kin joins Bitcoin and Ethereum (and no other) as a not-security, free to do as it pleases.

Integration is a no brainer: Kin is a way to avoid dealing with the SEC entirely.

Solana — The Fast and the Furious

Going forward our 19 person team will be focused on one goal: getting millions of people to buy Kin to use it. We aim to achieve this goal by executing a three part strategy: Moving the Kin blockchain forward to support a billion consumers making a dozen transactions a day with sub 1 second confirmation times Accelerating the adoption, growth, and success of all developers in the Kin Ecosystem ~ Ted Livingston, CEO of Kik, Founder of Kin Foundation

One wouldn’t fail someone for faulting at how Kin migrated to not one, not two, but three blockchains, finally settling on Solana.

Ethereum, then Stellar, and now Solana. But if you look at Livingston’s stated first strategy of supporting a billion consumers each making a dozen transactions a day with sub 1 second confirmation times, then the reasons for the move is clear:

50,000 transactions per second with 400 millisecond block times.

That’s Solana.

Right now, prior to ETH 2.0, Ethereum boasts just 15 transactions per second.

Defi tested the Ethereum blockchain, and found it wanting.

Fees ballooned, transactions slowed to a crawl, and other blockchains such as Tron and Cardano were seen moving in to the kill, offering alternatives to broken Ethereum.

How about Stellar?

“we can already do 1,000 txs/second today since we’re on @StellarOrg can easily scale to more than 2k txs/second” ~Mobius on Twitter

2k TPS didn’t cut it. Even spinning off to its own flavor of Stellar, Kin felt the need for more speed.

50k TPS, at a time when Ethereum was peddling 15 tps, and Stellar’s 1–2k tps.

Kin needed the fastest blockchain. A blockchain that even dares you to break it.

Because Kin is not building for what it needs now; it is building for its Billions of future consumers.

Future-Proofing

Say what you will, Kin cannot be accused of resting meekly on its laurels.

Kin fought the SEC Goliath to a standstill, ultimately receiving what it set out to do (determined not a security), while retaining enough of its treasure chest to keep moving forward.

And in the midst of its legal battle, Kin still went forward with its third blockchain migration, to future-proof for the foreseen billions of users.

Kin has blue sky plans.

Kin doesn’t need 50,000 TPS, but knows it soon will.

Can a major dapp integration, and a major exchange listing, be far behind?