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But the apps being built on the decentralized web promise to turn this dynamic on its head—and return control of user data to the users themselves, while still allowing developers to engage with, grow, and monetize digital communities through cryptocurrency and blockchain technology.
Kin is one such project that is attempting to do just that.
Launched by the Canada-based messaging app Kik and the Kin Foundation through a controversial ICO in 2017, Kin is described by its developers as a cryptocurrency that aims to empower its users instead of commoditizing them. And while Kik is currently embroiled in a lawsuit with the SEC over alleged violations of federal securities laws in connection with its Kin token sale, the Kin Foundation continues to look for ways to demonstrate the growth and health of its “shared ecosystem.”
“Cryptocurrencies like Kin offer an alternative business model that allows app developers to survive in an unfair environment dominated by big tech,” Kin’s head of blockchain Gadi Srebnik told Decrypt in an interview. “The realization that this technological oligarchy is choking competition and making the digital space increasing inaccessible is what drove us to create Kin,” he said.
And in order to level that playing field, said Srebnik, Kin has developed a more “fair way for developers to monetize” through the Kin Rewards Engine. Kin’s head of blockchain describes the Kin Rewards Engine as an ecosystem in which developers compete against tech giants together. They can build apps for consumers while earning rewards in Kin for making Kin’s network healthier, rather than relying on the sale of user data.
All app developers need to do to get started is download the Kin software development kit (SDK) and begin creating their own unique offerings, and “they will get rewarded by the KRE for the value they create,” said Srebnick.
“The more users participate in the ecosystem, the more value Kin gains," he said. And the thinking goes that in doing so the entire scheme “translates into better monetization” for everyone involved. “By being part of an ecosystem, rather than going it alone, smaller developers have a fair chance to create a sustainable source of revenue,” said Srebnick.
And since Kin is a blockchain-based token whose value increases when more people use it, everyone within the Kin ecosystem benefits from the growth of its network: app developers earn revenue when their users spend Kin, and Kin holders earn profits when the price of Kin tokens go up. And that’s where the red flags go up for regulators at the U.S. Securities and Exchange Commission.
While the Kin Foundation itself has not been named in the SEC’s complaint thus far, the foundation’s for-profit counterpart, Kik Inc., currently faces the prospect of damaging civil penalties as a result of its $100 million ICO. The Commission claims that the initial sale of Kin tokens constitutes an illegal offering of unregistered securities, and how the Kin token is ultimately defined by courts will have a lasting effect on the Kin network’s future.
Both Kik and the Kin Foundation, however, have insisted that Kin tokens should be viewed as a digital currency, such as Bitcoin, and therefore not subject to the laws and regulations that govern securities. And a big part of demonstrating Kin’s utility as a cryptocurrency involves decentralizing its network and getting Kin the hands of more and more developers.
Since 2017, Kin has been adopted as the digital currency of choice by more than 60 applications other than Kik—including health and fitness, gaming and news apps—which now make up the Kin Ecosystem. It’s a strategy that goes hand in hand with the Kin Foundation’s mission to break Big Tech’s grip on users and the commoditization of their data.
Said Srebnik: “Everything we do emanates from this fundamental value.”