Kik Interactive Inc. (Kik) is one of the first mainstream companies to launch a token sale. It hopes to leverage its existing 15M monthly active users to create an ecosystem that aligns the interests of Kik, its developer community, and its mobile app users, using the Kin token. The company claims that developers will be incentivized to create new and unique services and consumers can earn and spend Kin in the Kik app. Kik and the Kin Foundation received 90% of the total supply of tokens, so they too are incentivized to grow the Kin ecosystem. The ICO lacked key disclosure in important areas (e.g. technical details) and the project made statements about the token’s valuation that did not take into account key details. Since the ICO, KIN announced that it would launch on the Ethereum blockchain but then announced it would launch on the Stellar blockchain. It is unclear at this point whether KIN will launch on both or only Stellar.
Kin is conducting an ICO for its token beginning on September 12th. This is the highest profile attempt to augment an existing business with a token based model. We believe there are many other organizations examining the tokenization of existing businesses and will be watching the outcome of this project closely. Kin has the potential to enhance the existing user experience, create new use cases within Kik, produce new monetization streams for developers, and invigorate the app’s community. Unfortunately, key technical details about the token are currently lacking. A formal white paper has not been published and the codebase for their smart contract is not available for audit. Finally, the specifics about the ICO sale, including valuation and inflation rates are misleading. Our analysis shows a significantly higher valuation and first year float increase.