Chat App Kik Launches Second Blockchain to Boost Its Token Economy
Kik, the Canadian-based chat app, on Tuesday announced it’s launched its own blockchain as part of an effort to promote the use of its digital currency—known as Kin—in various online communities.
The move is notable because Kik, which raised $98 million dollars in a so-called “Initial Coin Offering,” already put its Kin currency into circulation on another blockchain, Ethereum, which it used to create and distribute 10 trillion Kin tokens last fall.
So why is Kik starting afresh with its own blockchain? According to CEO Ted Livingston, Ethereum is simply too slow to serve as a viable tool for the world of rapid token transactions he envisions. In that vision, Kins will be the coin of the realm in all sorts of Internet economies, from video games to ad blocking, and help to dethrone the online duopoly of Facebook and Google.
In a bid to make this happen, Livingston decided last year that Kik should turn to Stellar, an open-source blockchain whose technology is also being used for remittances, and by IBM and banks to move money in the South Pacific.
Care about crypto news? Sign up for The Ledger’s weekly newsletter.
In practice, this means Kik will create its own custom version of Stellar that will speed up Kin payments, and also let users move tokens back and forth between the new Stellar blockchain, and the existing Ethereum one. Livingston tells Fortune that this will entail converting a bulk of Kin’s 10 trillion treasury from Ethereum to Stellar in a way that pegs the values of the currencies to each other.
Needless to say, all of this is a very tall order, not least because it will involve new technology, known as atomic bridging, to move the tokens between the blockchains.
Livingston, though, is confident he can pull it off, in part because he did this before (albeit on a smaller scale) in 2014 when Kik ran a digital money program called Kik Points that saw the app’s users buy and sell emojis and other types of digital art. At the time, Kik was flying high but then incurred major setbacks as a result of patent threats from BlackBerry and the arrival of Facebook’s chat service, Messenger.
Today, Kik is something of a niche player, though the company says it has a loyal base on 15 million users. Last fall’s ICO also gives the company strategic room to maneuver thanks to the $98 million war chest it raised.
Livingston, who has been involved in cryptocurrency since the early days of bitcoin, sees the Kin tokens as a way to get back on top. He believes many Internet companies, including publishers, will be eager to embrace the tokens as a way to support an online economy that’s not dependent on Facebook. So far, Kik has signed up the gaming software giant Unity as well as e-gift company Blackhawk, to use the tokens in their operations.
“Most crypto projects to date have been technology-driven first and product-driven second. Kin has always been the opposite,” said Livingston in a statement. “Our goal is for Kin to be the most used cryptocurrency in the world, and [the Stellar blockchain] will help get us there sooner.”