Kin Foundation Treasury Report
A Glimpse Into the Controls and Processes for Kin Custody & Management at the Kin Foundation
In an effort to maintain transparency and accountability over the treasury intended to be used to build a fairer digital economy, we should also keep participants of the economy updated on the processes and controls that ensure that they are used as promised, while also repelling bad actors and mishandling. To that end, I recently spoke with a couple of the individuals responsible for managing and distributing Kin coins on behalf of the Kin Foundation to get a better idea of the latest iteration of these processes. While we cannot reveal certain specific details due to the security vulnerabilities involved, we believe that a brief high-level overview can provide needed assurances that steps have been taken to keep the locked funds safe and secure.
Current Status of the Kin Foundation Treasury
First, let’s review the way Kin was initially distributed. At launch, 10% of the total Kin supply was sold to the public, 30% was reserved for Kik to be vested over the next ten quarters, 45% was reserved to be distributed to other developers as rewards for helping grow the Ecosystem by the Kin Foundation, and 15% for marketing and operations of the Kin Foundation itself. That means there were 6T Kin, or 60% of the total supply, in the Kin Foundation treasury. Here is a small general overview of the current status of that treasury:
As of this writing, approximately 3.5% of the total treasury has been withdrawn to be distributed, be it via the Kin Rewards Engine, developer programs, challenges, grants, or other mechanisms for incentivizing Ecosystem growth. Furthermore, about 31.5% has vested but not yet been withdrawn; and 65% is unvested and is not eligible for withdrawal at all. All Kin that has not been withdrawn (vested and unvested) is held in escrow, which is described in greater detail below. The Kin is not actually held by anyone from the Kin Foundation, and instead is managed through a series of processes and controls to ensure the safety and proper use of funds. Please note that some portion of funds withdrawn for distribution could always return to the treasury depending on the outcomes and execution of the proposal they were approved for.
No Kin has been sold by the Foundation to date.
Custody
Kin is held in a mix of institutional-grade custodial accounts maintained by licensed operators that can only be accessed via a real-time, simultaneous approval from multiple authorized fiduciaries, under certain conditions, with verification of authenticity by a representative from the institutional faculty. These fiduciaries are specialized personnel who are separate from but operate on financial behalf of the Kin Foundation under a legally binding service contract.
Process
In addition to the multi-party verification process, funds can only be received after the proposed use of funds has been verified for accuracy and then approved by the Board of Directors. Until funds are actually required for a specific purpose, even vested Kin is locked in the treasury, and when it is distributed, it is sent directly for that precise purpose. There is no extraneous reserve of Kin at the Kin Foundation beyond what is needed for specific business operations, and any proposals for withdrawals must be supported with documentation and reviewed.
Safeguards
There are a multitude of safeguards and security measures in place to secure and ensure proper use of the funds, ranging from the previously described custodial verification methods and management by authorized fiduciaries to the legal rails that hold many of these components together. Also, while new proposals (marketing campaigns, developer reward adjustments, etc.) can be pitched to the Board, the distribution schedule outlined in the whitepaper can be considered the declaration of intent when it comes to the overall distribution of Kin and no changes will ever be made that incur any higher velocity of distribution than what was initially proposed.
Future Improvements
As long as complete automation of all funds is still not feasible, we are exploring other solutions to further “de-trust” both the treasury and the distribution of rewards, so that the Kin Foundation and contributing entities have even less control or possession of the funds and cannot use them without adhering to even more stringent approval processes, in addition to the safeguards already in place. We want to build a more fair digital world and understand that the minimalization of trust and risk are important.
What about Kik?
The Kin Foundation is a separate entity from Kik, but because the company was heavily involved in the creation and initial issuance of Kin, Kik’s Kin is also an important topic. Kik’s unvested Kin is still held in an ERC20 smart contract that unlocks a certain amount of coins every quarter, at which point it is swapped to the Kin blockchain and delivered to Kik’s custodial accounts. The company’s Kin is controlled in much the same way as those in the Foundation treasury in terms of processes and protections, except Kik has their own fiduciaries and defer to their own internal plans and guidelines for control and management. Please note that because Kik was involved in the issuance of the coin, their holdings are not considered by most third party indexes to be a part of the circulating supply, as they do not meet their definition of “public float”; so be aware that portions of Kik’s Kin will likely be considered to be circulating as soon as it leaves their possession. Also note that due to their allocation of coins and their size, Kik has chosen to forego earning from the Kin Rewards Engine until further notice.
No Kin has been sold by Kik to date.
Thanks to the parties involved for their contributions and taking the time to educate the community on some of the finer details of treasury custody.
To learn more about Kin, make sure to follow along and join the discussion at:
Website: https://www.kin.org
Reddit: https://www.reddit.com/r/KinFoundation/
Twitter: https://twitter.com/kin_foundation
Developer Forums: https://kindevforum.kin.org/
Community Forums:https://www.tapatalk.com/groups/kinfoundation/
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Kevin Ricoy
Communications @ Kin Foundation
www.kin.org
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Attribution:
- icon by Freepik @ flaticon.com
