Over the past few months, an increasing number of social media platforms have been hopping on the crypto-train. Apps such as the LINE Messenger and KakaoTalk are all set to get their own cryptocurrency tokens soon. Telegram’s ICO managed to raise $850 Million in the first round. The latest name to hop on to this hype train is that of Kik Messenger, which is all set to launch a cryptocurrency token that would run on two blockchains!
In an ICO last year, Kik managed to raise $98 Million for their Kin Cryptocurrency token. While details regarding the company’s plans weren’t clear back then, Kik has now announced that this Kin Cryptocurrency token will be deployed on two blockchains - Ethereum as well as Stellar. So far, Kin has been operating as an ERC20 token on the Ethereum network. Incidentally, ERC20 tokens just got a major nod of approval from Coinbase - which will soon be listing some ERC20 based tokens on its platforms. Gadi Srebnik, the developer of Kik Messenger commented on this, saying:
“While Ethereum provides liquidity for Kin holders, its load times and fees can’t support our needs for day-to-day consumer use. The addition of Stellar as a second blockchain will allow us to operate the Kin Ecosystem on a faster, more efficient foundation, with low transaction fees — which is necessary for us to achieve the speed and scalability that digital services in the ecosystem will require.”
The idea behind having two blockchain networks is for different kinds of payments. For internal transactions in a digital service, the Stellar blockchain network would be used. However, when it comes to external payments, it would utilize the Ethereum blockchain network as Stellar is less liquid in nature than Ethereum.
The Stellar blockchain system would go into effect starting late 2018. Once that goes into full effect, users would be able to move their tokens from one blockchain to another by locking them up in one network and unlocking them in another. This would work with the help of smart contracts. As per developers, this would help the Kin token maintain a stable value across both the blockchain networks.
“The goal of Kin is to create digital sharing economy where everyone is fairly compensated for the unique value they contribute,” said Ted Livingston, CEO of Kik. “While ethereum provides immediate liquidity for Kin holders, it’s not ready for mainstream consumer usage. Creating a bi-directional blockchain with Stellar will drive mass adoption of Kin by providing faster confirmation times, low transaction fees, and scalability that digital services in the ecosystem require.”
This is a complex mechanism and development of such a system where a currency would function across two blockchains would take quite some time! While Srebnik did not comment on it, it is expected that this extra effort that is going in the development of the currency running on two blockchains may result in the delay of the standalone Kin app as well.