The kin cryptocurrency is exploring a move from its own fork of Stellar to the Solana blockchain.
To recap, the mobile app company Kik ran a $98 million initial coin offering (ICO) for kin in 2017, which was made on the Ethereum blockchain. Then the company said that it would use Ethereum for security and Stellar for transactions. Then it forked Stellar and ran its own chain. Now that’s proving to be inadequate so the cryptocurrency will port over to Solana in a matter of months, pending adequate support from app developers in the Kin ecosystem.
“The fork of Stellar enabled Kin to reach millions of consumers, but we knew it would not be a long-term solution,” a draft Kin Improvement Proposal shared with CoinDesk reads. “Stellar has five-second block times, so irrespective of network load, a consumer could be seeing five-second latency on their transactions – not what we would deem a great consumer experience.”
Solana is a high-throughput blockchain that relies on a concept called optimistic concurrency control, which assumes that transactions generally don’t conflict with each other. The project describes several other key features of its technology on Medium.
“Kin is one the best ways to show what Solana is capable of,” Anatoly Yakovenko of the Solana Foundation told CoinDesk. “We expect to see other projects looking for speed and raw horsepower to migrate to Solana as well.”
The Kin Improvement Proposal says the move would enable an 84% reduction in latency. “Solana is measured to have approximately 60,000 transactions per second, with 400ms block times,” it says.
The Solana Foundation would actually pay the Kin Foundation for making this move, however, awarding it with up to 1% of the supply of SOL (roughly $6 million at today’s prices), with 0.1% unlocking for each new 1 million active users that join over a 24-month period.
The next step will be for Solana to make a presentation to kin developers about the process for switching chains. If enough developers agree to make the move, Solana staff will largely facilitate it and the process should be complete in a matter of months.
“It is ultimately up to the developers in the Kin ecosystem to decide if they want to migrate to Solana; however, we know that speed and throughput are two key issues within this community, and those happen to be two areas where Solana shines brightest,” Yakovenko wrote.
Based on the Kin Improvement Proposal, the Solana Foundation will start tracking progress on Jan. 7, 2021.
“Few projects in the blockchain space have shown an ability to grow a user base as fast as Kin has,” Gokal wrote. “We expect to see a myriad of use cases that come out of the Kin ecosystem within the near future that perfectly exemplify Solana’s leading performance.”
“What has happened over the last year, but mostly has been accelerated in the last six months, is the kin ecosystem has been growing like crazy,” Tanner Philp, head of corporate development at Kik, told CoinDesk.
Kin has seen a dramatic uptick in its core metric – monthly active spenders – over the course of the coronavirus quarantine period, Philp said.
In early March, there were approximately 1.5 million people who had spent kin in the prior 30 days. On April 20, the growth spike peaked at 4.4 million. The numbers have trended down somewhat since then but it’s still running at about 3.5 million, a significant gain over prior numbers.
Kin has been integrated into 57 different applications, but usage is dominated by a few popular ones, including apps for sharing media and making funny, shareable shorts.
Kik, the company that still oversees kin, began investigating new blockchains to pursue eight months ago in anticipation of the need to get to something faster, Philp said.
The key use for kin is payments, and that was what Solana was always designed to accelerate.
“Solana is one of the solutions, if not the only solution, that scales transaction times down into sub-second territory – the type of experience you’d demand for any mainstream application, such as Kin,” Yakovenko wrote.
Kik believes its Stellar fork has room for several more months, though pending developments could shorten that runway.
“What we’re getting close to is rolling out the new wallet for kin that Kik Inc. is working on, to connect the ecosystem, and that’s where you’ll start to see some more vibrancy within the ecosystem,” Philp said.
The wallet will make it simple to move kin earned in one app over to others. The company isn’t committing to a timeline but that wallet could appear in late Q3, Philp said.
When that happens, if users start moving tokens around between apps, it will become important to add metadata to transactions showing which application drove the spend. That data helps apps get properly credited by the Kin Rewards Engine. Stellar does not support a large enough amount of data to make its metadata features useful.
Kin was founded out of the company that formerly ran the Kik mobile app. The vision for the cryptocurrency was to create a way for people using mobile and web-based products to have a marketplace of value, but one where that value could be very tiny, for trade in items like digital stickers and access to small games.
Companies are rewarded for building out the kin ecosystem with daily emissions from the Kin Rewards Engine, which shares out its vast trove of undistributed kin to developers who are driving transactions.
“Kin started out with getting a lot of users using it across a lot of different apps,” Philp said. “Now it’s about getting people to spend larger amounts, and by that we mean going from fractions of pennies to pennies spent.”
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.