Kin Foundation Meltdown: Team Terminated and Board Resigned
Marc Rose — Head of Marketing, Kin Ecosystem
There is no bigger fumble in crypto than this.
Adam Cochran on Bits: a fork of Kin
I woke up this morning to the frustrating news that the team at the Kin Foundation had resigned.
After so many exciting developments over the past 6 months, this was a baffling turn of events.
Following the accusations flying on Twitter, listening to the conversation on Discord, and pulling apart what exactly happened, I realize now how much of a clusterfuck has been hidden from the Kin community.
I’ve been a supporter of and believer in Kin since it was a fledgling ERC-20 token involved in one of the biggest SEC battles of its day (way before all of the XRP drama).
A Brief, Non-Exhaustive History of KIN
Kin was created by Kik Interactive, best known for developing the instant messaging app Kik, one of the first popular chat apps for mobile.
Kik Interactive launched Kin in 2017 to monetize Kik in a way that was inclusive, accessible, and innovative for its users without exploiting them outright with ads or data harvesting. Kin is a medium of exchange intended for digital services and communities, such as games and social media platforms.
The Kin Foundation is a non-profit formed in 2017 to govern the development and maintenance of Kin and promote its adoption and use.
In 2019, the SEC filed a lawsuit against Kik Interactive, alleging that the Kin ICO was an illegal securities offering. In November 2020, the case was settled, with Kik Interactive agreeing to pay a $5 million penalty and refrain from future securities laws violations.
Meanwhile, Kin underwent several migrations to its underlying blockchain tech. It migrated from Ethereum to Stellar, then to a fork of Stellar that was intended as a native Kin chain. Finally, in 2021, the Kin Foundation announced another migration from Stellar to the Solana blockchain. This migration would address ongoing scalability issues and support the Kin ecosystem’s growth.
Ted Livingston, who founded Kik Interactive and the Kin Foundation, founded Code, Inc. in 2021. Their website states, “Code is an upcoming crypto wallet app that makes crypto simple to use.”
Code is a non-custodial wallet app built with Kin, designed to make using cryptocurrency simple for mainstream consumers–developed by the Code Inc. team that have been contributing to Kin since its inception, and helped drive the migration to Solana.
Kin Foundation, 2022, kin.org
OK, So WTF Happened?
On February 2nd, 2023, the Code Twitter account made the following announcement on twitter that has since been deleted:
We at Code have decided to fork Kin under the new name Bits. This decision comes after a difference of opinion with the Kin Foundation on how to best manage inflation. Given this we have decided to take a different path.
You can read more here: https://t.co/PQ9TNBofvn— Code (@getcode)
Introducing Bits: The Kin Fork Nobody Asked For
Bits have been airdropped 1:1 into wallets based on the Kin they held as of January 27th, 2023. Only wallets that held 100,000 Kin or more (approximately $0.75 USD) were included in the fork. Kin held on exchanges or in on chain programs was unfortunately not included since verifiable attribution to the actual depositors wasn’t possible. Various Kin Foundation wallets were also not included.
Code, Feb 2nd, emphasis mine.
This announcement was stunning. Code, since its inception, was always meant to integrate with Kin. Code vaguely described the rift with the Kin Foundation as “a difference of opinion […] on how to best manage inflation.”
I emphasized the last sentence of the above blockquote to highlight the seriousness of the split between Code and the Kin Foundation. Code is moving forward with a fork and specifically cutting the Kin Foundation out of the picture.
For the record, I have received my Bits, but according to Code, “we welcome other developers to integrate Bits [but] we won’t be offering any technical support to do so.” One of the facets that attracted me to Kin was their welcoming and inclusive message and mission. They offer and support SDKs to build a developer community. It looks like Code will be taking a different, more lonely tack with Bits, and I’m wondering how they plan to drive adoption with that approach.
Kin Foundation Response
The initial response from the Kin Foundation was measured but refreshing (tweet has since been deleted).
While the Kin Community was looking forward to @getcode as one of many great wallets for Kin users, this will have no discernible impact on the ongoing growth and development of Kin. Look forward to a more detailed statement tomorrow. https://t.co/g22oWrKhfT
Kin Ecosystem ⬢ (@Kin_Ecosystem)
This was a sensible response and much appreciated by the Kin community. Code is just one app, after all, and the Kin Foundation has been delivering lots of good news; for example, they announced integrations in the gaming space, and Kinetic—a low-code Solana on-ramp to build with kin.
Unfortunately, the calm did not last.
Kin Foundation Team Resigns
The day after their response on Twitter, the Kin Foundation announced that the entire team had resigned.
Hey all - many at the kf were also blind sighted and still trying to figure out what’s going on. One thing is for sure, we all are super disappointed because we believed in the project and we’re gaining good momentum recently (forgetting about the price). We need to let everything settle for a few days.
Among other things, the Kin Foundation resignation announcement made the following assertions:
- The Kin Foundation was taken by surprise by the Code announcement to fork Kin.
- Ted wanted the Kin Foundation to shut down and did not appreciate its progress.
- The Kin Foundation is in debt to Kik Interactive for approximately three million dollars.
- “Our entire team will be resigning from the project today because we could not continue being continuously pressured into a direction that would be detrimental to Kin.”
- The team may consider launching a new project using Kinetic.
- Ted remains the sole director of the Kin Foundation.
Ted And William Spar On Twitter
This next bit leans heavily into fingerpointing and unverifiable comments by Ted Livingston and William Mougayar, the Executive Chairman of the Kin Foundation.
This article previously featured a link to a long twitter thread from Ted Livingston going into deepr detail, but he has since deleted the thread. Here are a few points from that thread:
- Ted accused William and Matt Hannam—Executive Director of Kin Foundation—of planning to break the Kin Whitepaper funding rules by doubling the Kin Foundation operational budget to 500B Kin.
- The Kin Foundation team didn’t resign, they were fired.
- William confirmed this in response, saying they gave the team a 2-month severance.
- This may seem pedantic, but the official message from the Kin Foundation said that the team had resigned. It speaks to William’s credibility that he lied about resignations to bolster the Kin Foundation’s story.
- The Kin Foundation initiated a process one week ago to terminate Ted as a Board Member.
William didn’t mince words with Ted, responding to several of his tweets to highlight toxic behavior and accusations. He subsequently deleted these tweets.
I’m done stooping to your level Ted. I trusted you 3 years ago, but you have disappointed. The crux is you wanted to kill Kin so you choked its treasury and blamed us. If you really wanted Kin to succeed you could have resigned from the Board shortly after you forked to Bits.
William Mougayar ⬢
A Likely Chronology of Events
- A disagreement over funding formed between Ted, William, and Matt during late 2022 and early 2023.
- William and Matt moved to eliminate Ted from the Kin Foundation Board.
- Ted retaliated by having Code drop support for Kin and fork the project.
- William and Matt fired the team and resigned from their positions at Kin Foundation.
I’ll correct and update this chronology if it proves incorrect, but as far as I can tell, it’s how this all went down.
This is devastating news for the members of the Kin Foundation and the Kin community as a whole. Struggles and setbacks have always overshadowed the promise of Kin, and this new chapter may lead to a dismal end.
I’ll be keeping my eye on any fiurther developments.
I hope, for the sake of the Kin community, that Kin can find a way to survive, or that Bits finally achieves the promises of Kin, but I have serious doubts that this will have a happy ending.