Kin, the cryptocurrency from the Kik messaging service, is planning a fork from Stellar to avoid issues of scalability and transaction fees.

Kik's crypto token, Kin, exists as an ethereum-based ERC-20 token. The Kin Foundation, which manages the development of Kin, has announced on Tuesday that it will fork Stellar to create its own unique blockchain that will be free from any kind of transaction charges and will be operated through permissioned nodes. Kin was created as a new digital currency by the team behind the Kik messenger; it serves as a medium to earn and spend within the Kik app.

Kik and Kin

Kik is a mobile messaging service that has over 300 million global users. It is available on Android and iOS platforms.

A user is able to earn Kin for contributing to the Kik community and can spend the Kin coins for goods and services inside Kik. For instance, one can take part in fun missions, like watching particular online shows and rating them and earn Kin coins in return. The crypto tokens can be redeemed for content, experiences, services and more. Developers and content creators can be compensated in Kin tokens for their offerings, and the users watching ads are also paid in Kin coins as their ad viewing activity keeps the network agile and functioning.

Kin emerged as an advanced version of Kik Points, a digital currency launched in 2015 within the Kik messenger which was similar to a reward-points scheme. Kik Points successfully recorded an average daily transaction volume of 300,000 with a peak of 2.6 million, which led to the creation of blockchain-based Kin coins.

Why Kin is Forking Out?

Since Kin is based on ethereum and adheres to ERC-20 token standards, the founders of Kin are concerned about scalability issues. The challenge of scalability was apparent when the virtual cat breeding game, CryptoKitties, went viral on ethereum. Additionally, there are concerns about the rising cost of transactions on such networks. (See also, What is ERC-20 and What Does it Mean for Ethereum?)

To avoid the problem, Kin had earlier planned to transition to the Stellar network. Later, the approach was further refined and the team envisioned a two-chain system in which the Kin cryptocoin would operate in parallel on both Stellar and Ethereum networks. 

However, Stellar continues to face “business scale” issues, as per Netanel Lev, vice president of research and development at the Kin Ecosystem Foundation. As Kin has specific goals that may not achieved with Stellar, it decided to go separate. The new blockchain will be a fee-less proprietary blockchain, and will be based on the use of permissioned nodes.

Kik CEO Ted Livingston told CoinDesk, "I think what makes Kin unique is it's one of the very few projects where product is driving the technology and not vice versa."

Kin plans to use a big pool of cryptocoins that it holds in reserve to automatically pay entrepreneurs for their contributions and development of economic activity through the Kin Rewards Engine.

Though a fork is planned for Kin, the two development teams expect to continue their partnership.