One week ago it seemed like it was only a matter of time before I would no longer be part of Kin. A disagreement at the Kin Foundation led to a process being invoked that would remove me from the board. With concerns about the amount of inflation, and how operational funds were being allocated, my team at Code and I made the decision to fork Kin. We would call it Bits.
Rather than create Bits as a totally new cryptocurrency with a completely new ownership structure, we decided to do our best to give every Kin holder the same amount of Bits. So if someone had a million Kin, we would airdrop them a million Bits. We also wouldn’t create any extra Bits for ourselves.
We decided to do this because we wanted to do our best to honor the Kin community. The last five years have been a grueling journey, and we deeply appreciate all the Kin developers and Kin community members who have been with us on this journey. We were concerned with the direction the Kin Foundation was taking, but rather than get into a big public disagreement, we felt that the best option for was for us to forge a parallel path. Our intention was to airdrop Bits to Kin holders, announce the fork, and then continue on. This way Kin holders would get to share in both journeys, no matter how each journey played out. It felt like the best win win we could find in a difficult situation.
I’m not proud of what happened next. The announcement of Bits led to a public debate between myself and others in the community. I tried my best to take the high road but didn’t always succeed. For that I want to apologize to the community.
What caught me by surprise was receiving the resignations from the other Kin Foundation board members, and hearing about the termination of the Kin Foundation team. That was not something I expected, and left me in the position of being the sole remaining board member at the Kin Foundation. As a result it has fallen on me to chart a path forward for the Kin Foundation. As such I wanted to share my initial recommendation with all of you, and to hear your feedback on Twitter. Please tag your thoughts with $Kin.
Here is where I think the Kin Foundation goes from here.
1. We Need to Acknowledge That the KRE Has Been Paused, and Will Remain So For Now
The Kin Foundation no longer has any employees, so there is no one to administer the KRE. As a result the KRE is not running, and will remain that way until further notice. I apologize to all the Kin developers who are affected by this. You believed in Kin and worked hard to integrate it, and now the KRE isn’t running. Hopefully we will find a way to come back stronger.
2. We Should Decentralize the KRE by Launching Many Different Smart Contract Experiments
The vision for the KRE has always been to turn it into an autonomous smart contract that runs itself. This is the only way that it can truly be relied on by developers, and the only way where it won’t be open to control by centralized actors.
We should start small, creating a smart contract, giving it a bit of Kin, and seeing how it does. Our goal should be to find a simple, objective, and robust way to reward developers for the buy demand they create among their users. So if a developer is able to get their users to buy 100 Kin to use in their app, then the smart contract should reward the developer with say 50 Kin. This is how the KRE could become the flywheel we’ve always hoped for.
Rather than a centralized effort by the Kin Foundation working on a single KRE smart contract, this should be a decentralized effort by the Kin community where many different smart contracts are tried. Different approaches should be proposed, discussed, coded, published, funded, measured, and iterated on, until the ideal KRE smart contract can be found.
3. Transfers Out of the Kin Reserves Should Be Approved by Kin Holder Votes
As these first KRE smart contract experiments become available, the Kin community should hold stake weighted votes to approve transferring Kin to them. The amounts should be small to start, and the voting should be simple. Do you agree that this smart contract should be funded? Then send one quark from your wallet to this address. Do you disagree? Then send one quark from your wallet to this other address. After the voting period ends, the stake of all the voting wallets should be added up, and the transfer either approved or rejected. It is also my view that Kik’s 3T Kin and the 5T Kin Reserves should not be allowed to participate in this voting process.
The initial voting process should optimize for speed and simplicity, rather than aesthetics. These early votes will likely appear basic and rudimentary to the rest of the crypto industry, but that is ok. Over time we can iterate on the voting mechanism. In particular we will probably need to address the potential vulnerability of some people buying Kin, voting, and then immediately selling it, just to cause problems. At that point we will probably need a more sophisticated voting process that requires voted stake to be locked up for a certain amount of time if a vote passes, so that it can’t be immediately sold. Other vulnerabilities and challenges will likely emerge as well, and have to be addressed.
In the interim I will do my best to have the Kin Foundation honor existing developer grant contracts. When payments are necessary a vote won’t take place given that they come from previous commitments, but context on each payment coming out of the Kin Reserves should be shared with the community whenever legally possible. New developers grants will be put on hold, so that we can put all our community effort into finding a decentralized KRE.
Moving Forward
This has been a tough week for the Kin community. I hope the silver lining is that this becomes the push we needed to get on a path to a decentralized KRE. If you care about Kin I hope you will contribute to this effort.
I also want to appreciate the good work that has been done with Kinetic, which has allowed developers to take control of their own Kin integrations. With no employees at the Kin Foundation I hope we will be able to come together as a developer community and support each other.
Finally I want to talk about Bits. Launching Bits looked like the least bad option at the time, but it always pained us that Kin held on exchanges couldn’t be included in the airdrop. With Kin’s inflation now back in line with the original whitepaper we’ve decided to abandon Bits, and revert to using Kin in Code. We look forward to launching Code in the coming months.