Kik announces Kin, its own cryptocurrency built on top of the Ethereum network, which will be used as the app's primary transaction currency
Our portfolio company Kik announced some big news today. Virtual Mining Bitcoin News : Bitcoin value surges past $2,500 — an all-time high and 150 percent gain this year Evelyn Cheng / CNBC : Bitcoin surges to record above $2,500, bringing 2017 gain to more than 150% Shane Dingman / Globe and Mail : Canadian messenger app Kik to launch its own Bitcoin-like digital currency Jessica Galang / BetaKit : Kik launches Kin to drive mainstream adoption of cryptocurrency Tweets: Ted Livingston / @ted_livingston : This is the biggest thing Kik has ever done. A new cryptocurrency, and a new ecosystem: http://medium.com/... Harry McCracken / @harrymccracken : The statute of limitations on jokes about Microsoft's Kin has apparently passed. http://betakit.com/... @cryptocryptics : The crypto bubble grows. Classic tech startups are releasing their own altcoins: http://twitter.com/... Louis Gray / @louisgray : I'm not calling a cryptocurrency bubble, but a holdover from the group messaging bubble is pivoting to make one. http://avc.com/...
Context & Ripple Effects
Kik is making the leap from messenger to token issuer: Kin will run on Ethereum and become the app's primary transaction currency, which CEO Ted Livingston frames as the biggest thing the company has ever done. The announcement lands amid Bitcoin's surge past $2,500, giving the story a receptive market backdrop.
The move set off a two-year arc the corpus traces end to end: a $50M private token sale to institutional investors within months, then roughly $100M raised overall, before the SEC sued Kik over the 2017 sale as an unregistered securities offering — a lawsuit that ended with Kik selling its messenger to MediaLab to focus on Kin alone.
First-order effects
- Kik's users and developers now transact in a single app-native token built on Ethereum, replacing ad-hoc payments inside the messenger.
- Kik immediately becomes one of the most prominent consumer companies to fund itself by issuing a cryptocurrency rather than equity or ads.
Second-order effects
- Institutional buyers took a $50M private allocation of Kin ahead of the public sale, splitting the raise into tiers and pulling Wall Street money directly into a chat app's economy.
- In-app features like earning Kin through quizzes and polls and tipping group admins and mods give the token real sinks and faucets, pressuring rival messengers to answer with their own reward economies.
Third-order effects
- The SEC's decision to treat the Kin sale as an unregistered securities offering turned consumer ICOs into an enforcement category, forcing token-issuing startups to weigh regulator risk alongside user growth.
- The endgame — Kik shedding its messenger to MediaLab so the remaining company could pursue Kin — shows token-first companies restructuring around the asset rather than the product that launched it.
The trend: Consumer apps are issuing their own cryptocurrencies to fund development and bootstrap in-app economies, with securities regulators and eventual corporate restructurings defining how far that model can go.