Kin Rewards Engine Performance Report (Q1 2021)

Written by: Kevin Ricoy

Head of Growth at the Kin Foundation

March 24, 2021

Highlighting Key Learnings and Best Practices to Optimize KRE Performance

The Kin Rewards Engine or “KRE” is an algorithmic mechanism that allows apps and services to earn rewards for integrating and driving adoption of the Kin cryptocurrency.

As we approach the end of the first quarter of the year, it is important to analyze the way that Kin Rewards Engine 3.0 has affected developer and user behavior, as well as its impact on the Kin Economy.

What’s Working

At a glance, here is what has been working as intended since the implementation of KRE 3:

Active User Balances or “AUB” refers to the aggregated balances across all users that have earned or spent Kin in the past 30 days within a particular app. Designed to incentivize the creation of compelling experiences that entice users to collect and utilize Kin, the introduction of AUB has shifted developer behavior to optimize their KRE earnings.

By determining KRE rankings based on AUB, we are able to quantify an approximate economic weight for apps based on their ability to incentivize the accumulation of Kin across their active user bases.

As we can see, the incentive design is working for the key factor that the Kin Rewards Engine payouts are based on, as it has risen exponentially. In particular, two apps have performed extraordinarily well under the new KRE schema, allowing us to study and learn from the optimizations that allow them to do so well.

Perfect365: Sharing More with Users
Perfect365 has been re-investing their Kin earnings by paying it forward to their active users, which has resulted in a higher “AUB” metric and therefore meaningful weekly payouts: 

DateAUB (in Kin)Payout (in Kin)
Jan. 23, 20211,941,788,226+ 774,322,712 KIN
Jan. 30, 20212,032,982,277+ 725,501,472 KIN
Feb. 6, 20212,128,076,459+ 608,713,572 KIN
Feb. 13, 20212,235,534,000+ 547,169,422 KIN
TOTAL2,235,534,000 KIN2,655,707,178 KIN

Takeaway: Using their KRE earnings to give back to active users has paid off for Perfect365, as their weekly payouts have allowed them to earn that Kin back, and then some. This shows that with KRE 3.0, treating users as partners in growth by compensating them for their engagement is a winning strategy that increases an app’s future earnings. This is an example of positive behavior that aligns with the vision of Kin.

PeerBet: Kin Portability, Sponsored Earns, and Incentivizing Deposits
PeerBet was built from the ground up around Kin, so even though it is a relatively newer and smaller platform, the development team has already implemented a number of clever optimizations that have caused their AUB to skyrocket

  • Showing Users their Wallet Addresses
    By exposing users’ public addresses on the Solana blockchain, PeerBet has more easily enabled the independent purchase and deposit of Kin by those users. Consequently, users can buy Kin on exchanges in order to top-up their balances and increase their active engagement in the PeerBet app. This simple optimization has allowed them to increase their AUB without having to reinvest all of their KRE earnings while also contributing to consumptive demand for Kin.
  • Sponsored Earn Experiences
    PeerBet allows users to engage in sponsored experiences that compensate the user in Kin while also generating revenue for the platform. This has allowed PeerBet to amass a higher AUB ranking without reinvesting all KRE earnings, and generate additional profits at the same time.
  • Incentivizing Deposits
    Further compelling users to collect and use Kin, PeerBet has implemented a loyalty bonus system that rewards users for holding a Kin balance based on size and meeting the daily activity requirement in the app.

Takeaway: PeerBet has shown that the combination of a compelling use case combined with the ability for users to deposit their Kin boosts app AUB while creating consumer demand for Kin based on its utility as a virtual currency.

Room for Improvement

AUB may be rising exponentially, however, simultaneously, both Monthly Active Spenders and Earners are falling:

Key factors of this decline include:

App Migration
Some apps have not yet migrated to the Solana blockchain, which has contributed to the decline in monthly active users. While most of those apps did not represent a significant amount of users, the pending migration of apps like Kik Messenger should help recover some of those numbers. The completion of an updated Unity SDK will also enable some of the smaller games in the ecosystem to migrate if they so wish, and we are also working on a number of new implementations that would unlock an even larger number of developers to participate.

COVID Growth Calming
As lockdowns were put into effect around the world, we saw a coinciding spike in user activity. As these effects begin to taper, we may see some of that growth acceleration come back to normal levels.

Lack of KRE Incentive 
Most relevant to this report, the Kin Rewards Engine no longer directly incentivizes Monthly Active Spender growth. While this has resulted in an intended shift toward more economically impactful behavior, we believe that metrics like these are also valuable, and thus could be factored back into rankings in some way. This is, however, still being contemplated.

Ecosystem Feedback

We are always listening to the developer community in order to support them in creating the best possible experience with Kin. As a neutral party in the ecosystem, we evaluate all feedback and consider all input on the ongoing iteration of the KRE to be valuable.

Here are some of the key themes we have heard from developers regarding how the KRE has been working for them:

Factors Beyond AUB Matter
Some developers have expressed that they no longer feel as incentivized to grow new active users, as it does not necessarily correlate directly to higher KRE rankings. On a relative basis, it is true that other factors also matter when considering the health of the Kin Economy, including the number of users, amount of Kin being transacted, and more. This is vital feedback as we consider what the next iteration of the KRE might look like.

Difficult to Understand and Model
Despite efforts to simplify the KRE by reducing the algorithm to a small handful of key factors, we have learned that it is still not feasible to expect development, business operations, and product personnel to comb through and digest a GitHub repository in order to optimize their user experiences. In response to this feedback, we are exploring ways to support the community by accommodating the creation of more digestible educational material and a KRE Payout Simulator into our roadmap.

Deficit Spending
In order to share more Kin with users, some apps have lamented that they have to either buy more Kin or spend their earnings. While this is true to an extent, (i) Perfect365 has shown that this is a profitable long-term strategy that enhances the app experience for users, and (ii) PeerBet has shown that by creating compelling use cases and allowing users to top-up their balances independently, apps are able to amass higher AUB without having to invest on their own. As previously mentioned, the Kin Foundation aims to better support the community in understanding and modeling Kin for their own respective scenarios. We are also exploring new ways to help set up ecosystem apps for success — something which we will expand on later in this article.

Disincentive to Enable Tourism
Allowing users to withdraw their Kin and use it elsewhere would currently result in a negative impact on KRE ranking. For this reason, apps are incentivized to get users to collect and spend as much Kin within their app as possible. As the pathway to entry becomes easier for prospective Kin users, we should also consider how to accommodate the free movement of Kin by all holders (while adhering to regulatory and App/Play Store policy guidelines).

Boosting the Kin Ecosystem

Community and developer feedback matter. The Kin Foundation aims to make the KRE as fair as possible while optimizing for, not only economic and user growth, but also benefit to those who face the issues that Kin was originally created to solve. We need to do more to make sure that apps are set up for success, so that they can earn rewards based on their hard work to drive adoption of Kin. We aim to reach a point in time where every app is optimally positioned to both compete for KRE earnings, and contribute to economic growth. Fortunately, the changes required are mutually beneficial, and win-wins are what Kin is all about. Here are some of the ways we think we can help the ecosystem improve:

  1. Optimizing App Experiences
    The number of opportunities available to the Kin Economy has never been greater than it is today. As the secondary market continues to mature, the options for users wishing to enter the Kin Economy also become more robust. While increased liquidity is important and healthy for a growing economy, developers should be most excited about the unlimited opportunities to create compelling use cases for Kin and the ability for millions of consumers around the world to purchase Kin to bring into their app — therefore increasing AUB. There are a number of ways that we can help developers better position themselves to benefit from Kin:
    • Expose user wallet addresses to enable deposit, and guide users on how to independently acquire Kin if they wish to do so.
    • Create compelling use cases for Kin that entice consumers to purchase it for its utility.
    • Explore creative ways to share Kin with users with and without reinvesting KRE, such as incentivizing users to engage with revenue-generating features and sharing some of that revenue with them, implementing ways to purchase Kin in-app, leveraging Kin to increase engagement and retention, in turn increasing the value of the platform, and more.
    • Ensure that users are being properly educated on Kin so that they understand and contribute to the app’s growth and well-being.
  2. Information, Tools, & Support
    The importance of information availability should not be overlooked. Some ways that we can better prepare apps to perform well in the Kin Ecosystem are simply by providing more abundant and adequate resources to developers:
    • More easily digestible material that explain KRE fundamentals
    • Tips & tricks for optimizing to compete for KRE earnings while improving the user experience and contributing to economic growth
    • A KRE Payout Simulator
    • Continued support from the Kin Foundation

We look forward to making progress on these fronts by working together with existing and future developers to better serve their needs.

Thanks to the positive momentum of the Kin Ecosystem, now is the time to boost the readiness of developers to compete collaboratively in a mutually beneficial environment, and increase the quality of app experiences in the process. Starting with the upcoming hackathon, criteria for KRE eligibility may become more stringent, with requirements that are intended to guide apps toward optimizing to compete for earnings, while also offering a better experience to the user. 

In order to even the playing field, we will also be working closely with existing ecosystem apps to identify ways to help optimize their user experiences, while also contributing even more value to both their own users and the greater Kin Economy. We also want to explore ways to support them in bringing new exciting and compelling Kin use cases to life within their apps.

Contribute to the Kin Rewards Engine

The Kin Rewards Engine is iterated upon in an open-source environment by the community of developers, businesses, users, and supporters around Kin. Our community is one of the strongest in crypto, and that’s why we also want to hear your feedback! If you have ideas for how to improve the Kin Rewards Engine, you can now submit ideas via a formal proposal without any GitHub knowledge by using the new KIP Form on our website:

Submit a Kin Rewards Engine Proposal