Evolution of the Kin Rewards Engine – 4.0

Written by: Matt Hannam

Executive Director at the Kin Foundation

August 8, 2022

Kin Foundation Proposes KRE Improvements

The Kin Foundation has proposed updates to the rewards engine algorithm aimed at shifting the incentive for developers in the Kin Ecosystem towards more specific behaviors that will allow the economy to grow. 

Kin’s mission is to be a currency that everyday people actually use in their lives. We have learnt that incentivizing the growth of spenders within Kin Ecosystem applications does correctly drive the adoption of Kin as a currency, but only in part. To stimulate the economy, KRE 4.0 proposes incentives to:

  • build higher quality use-cases; and
  • create more economically meaningful transactions.

While the community may be familiar with many of the concepts in the proposal, their definitions in some cases have been reworked.  There are also a number of new concepts to understand such as:

  • a new method for ranking app performance based on an app’s overall economic contribution;
  • a time limited boost for apps who are new to the Kin ecosystem; and
  • a curving formula for the reward distribution which replaces the monopoly clause.

You can review the full proposal for KRE 4.0 here, and we have included a step-by-step explanation to provide more context for how the algorithm is applied.

Following feedback and community discussion after publishing our Initial Thoughts and Direction on the KRE’s Evolution, we will not proceed with proposing burn mechanics into the reward formula at this time and may consider this in a future proposal.

The proposal for KRE 4.0 does not yet have an implementation date, but we intend to announce an implementation timeframe at a later date. We would like to focus next on seeing a healthy discussion across the ecosystem. Therefore, please submit your thoughts, feedback or comments directly on Github in the Discussions section located here.

Background to this Kin Improvement Proposal

In January 2022, following consultation and input from developers, users, and the Kin community, the Kin Foundation proposed KRE 3.1 although following additional community feedback the proposal was not ultimately implemented. In the spirit of continuous improvement, the Kin Foundation took the challenge to deeply re-examine the KRE with a new set of lenses. So, over recent months, we have worked in consultation with an academic professional who is an expert in quantitative economics of digitization and blockchain to help us pinpoint KRE weaknesses and recommendations. Concurrently, we also re-analyzed and revisited many previous community proposals for the KRE both recent and historic. This proposal is an aggregate of these contributions which has formed the basis of this proposal. 

Kin Foundation and the Kin Rewards Engine

The Kin Rewards Engine is overseen by the Kin Foundation, a non-profit entity that aims to foster the viability and effectiveness of Kin’s monetary systems to drive macroeconomic growth. All actions and decisions on the governance of the KRE are made with this goal in mind. Kin is designed to build a new digital economy where everyone is fairly compensated for the value they create online. By improving the Kin Rewards Engine to be more equitable and prosperous for the new digital economy’s participants, the Foundation hopes to continue moving that mission forward.

Contribute to the Kin Rewards Engine

Anyone can contribute to the Kin Rewards Engine discussion; participation in its iteration is welcomed and encouraged. To learn how to submit your own proposals and participate in the discussion, review this How to Contribute Guide

About Kin

Kin is a decentralized cryptocurrency purposely designed to integrate easily across mobile and web apps, with a built-in incentive model that rewards developers for increased usage. Apps built with Kin get paid for creating compelling cryptocurrency-based user experiences, where greater engagement results in shared economic benefits for users and developers. Today, the Kin Ecosystem boasts 65 million wallets, and has distributed over $70M in rewards across 80+ apps since its inception in 2017. Kin is an SPL token on the Solana blockchain, enabling consumer-scale apps to transact swiftly, with minimal-to-no fees. Learn more at Kin.org.

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