Kik held an initial coin offering (ICO) that was anything but successful. The social media platform was ultimately targeted by the U.S. Securities and Exchange Commission (SEC) over the offering and has made some brazen claims in an effort to try and show its real value. Coin Metrics, a firm dedicated to analyzing and reporting on cryptocurrency asset data, dove into a few of the claims about Kik’s Kin digital currency and emerged with analysis to show that the company’s assertions were extremely off base. The future isn’t looking very bright for the messaging platform.
One of the claims Kik made was that “Kin exceeds Ether and [Bitcoin Core] in daily blockchain activity, demonstrating Kin’s wide acceptance and adoption.” In its report, An Analysis of Kin’s On-Chain Activity, Coin Metrics explains that blockchain activity is measured using two criteria—operations count and transfer value. Kik used operations count in making its assertion, stating that the activity is “the number of operations on the blockchain in the last 24 hours.”
However, this measure needs to be broken down by payments and account creation, according to Coin Metrics. Account creations on Kin were relatively high, but so is the number of empty accounts. It points out that about 93% of all the accounts are empty, which makes them unviable for measurements.
Coin Metrics takes a look at transfer value, as well. Because it believes that transfers can include “noise”—transfers between accounts held by a single person, certain transactions need to be eliminated. To provide a more accurate picture, it has created an “adjusted transfer value” metric that should result in a more truthful representation. Using this metric, the analytics firm found, “Despite having a high number of daily operations, Kin’s adjusted transfer value is much lower than the other chains.” It also asserts, “While other chains have average transfer values in the thousands [of dollars], Kin’s average transfer value has been trending towards $1.”
Kik has also claimed that “…over 300,000 people earned and spent Kin as a currency…” However, Coin Metrics shows that, at its peak time, there were only about 35,000 Kin addresses that held more than 10,000 Kin, which is equal to about $0.23. It concludes, “This is orders of magnitude less than other blockchains in our sample, which each have at least 1,000,000 addresses that hold at least $1 USD.”
Ultimately, these revelations would seem to indicate that Kik was content in skewing data to support its reporting, instead of allowing the data to accurately speak for itself. This should seriously call into question the legitimacy behind the company’s desire to raise $5 million from the public to fight the SEC charges.
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