This site is created and maintained by users of Kinesis.money. We are not affiliated with Kinesis – we simply want to spread the word about this innovative and (potentially) transformational new system. If you find this page useful in explaining what Kinesis is please share it as you see fit.
What is Kinesis, Anyway?
Kinesis is Sound Money for the 21st Century:
- Kinesis combines 21st Century distributed ledger technology with time-tested precious metals. Every Kinesis coin is backed 1:1 by vaulted, audited, insured metal – what you are buying is legal title to metal in Kinesis’ vaults.
- Behind the scenes Kinesis is vaulted precious metals storage. All metal is owned by the users, and is stored in 15 vaults across 10 countries, audited twice annually by Bureau Veritas.
- Payments are handled by the Kinesis blockchain. Users can pay each other directly using the blockchain, or a debit card can be used to spend Kinesis assets out in the real world. If you prefer you can have your metal delivered, anywhere in the world, for very reasonable rates.
- The magic is in the fee structure built in to Kinesis. Every trade, payment, or transfer has an associated fee – between 0.22% and 0.45% – and these fees are pooled and paid back out to users every month. This allows Kinesis to pay a yield without loans – it’s all based on user fees.
I should re-emphasize that last point: Kinesis has figured out how to make vaulted, insured, audited gold and silver produce a yield. The process is simple enough it might take a while to get your head wrapped around it:
- Every transfer in Kinesis has a fee attached to it that is automatically assessed by the blockchain.
- This fee is low – 22 to 45 basis points. If you spend $100 of gold on the debit card, an additional $0.22 of gold is also deducted from your account. That tiny bit of metal goes into something called the “master fee pool.”
- This isn’t much, but multiply your contribution with millions of others in the month and the master fee pool can get pretty big.
- Next month, the master fee pool is paid out as yields, with 57.5% of the yields going to users of the system. Kinesis and its partners share the remainder.
What can Kinesis do that Other Solutions Can’t?
If you’re a precious metals holder, then moving your holdings to Kinesis offers you zero fee storage, and yields paid in metal every month simply for holding in Kinesis.
If you’re a crypto trader, then Kinesis offers you the ultimate stable-coin: across all of human history, nothing has held value as well as gold has. Each KAU on the Kinesis blockchain represents legal ownership of one gram of gold. You’ll pay about half of a percent in fees going from your cryptocurrency to KAU and back, but you’ll also be earning a yield for every day you hold KAU in your account. And you can sleep well knowing you’re not exposed to Tether and its uncertain future.
If you’re simply someone tired of watching the value of your currency slowly eroded, then Kinesis offers something really similar to an old-fashioned savings account, denominated in gold and silver. You’ll get a yield on your holdings for every day they are in your account, you’ll get a yield for minting if you transfer in large amounts, and Kinesis just announced a velocity yield which will be a yield given to people who spend or trade in Kinesis.
Nobody Offers Free Vaulting. This Sounds like a Scam
Kinesis isn’t vaulting for free: Kinesis offers vaulting and yields in exchange for about one sixth (17.5%) of the fees that are generated in the system. Kinesis created a sound money system people can opt into today, because they have a model that allows them to profit even while giving the majority of the fees back to the users of the system in the various kinds of yields.
It’s innovative, and it’s bold, and it’s trying to change the world, but it’s not a scam.
It’s digital gold and silver. Backed by physical. Deliverable, with a yield.
OK, So How Does Kinesis Work?
From the user’s perspective it’s quite similar to other payment options people are used to. There’s an app for payments from your phone or face-to-face. There’s a web site you can log in to and send or request payments. You can even send gold and silver to someone who isn’t a Kinesis user as long as you know their e-mail address – once they create their account the funds will be sitting there for them. Debit cards can be topped off with KAU or KAG and spent in the real world.
Fees are complicated to get your head wrapped around, but if you look at an example it should start to make sense.
Kinesis from Ground Zero
At its core Kinesis is a bunch of employees, a bunch of vaults with Brinks and Loomis, and some servers running a blockchain and an exchange. Kinesis owns no metal – it’s all ours.
So let’s assume you’re Kinesis’ first user, and you want to convert your dollars to digital gold (KAU):
- First, you transfer money into Kinesis. This is the hardest step, and most use a wire transfer or send crypto assets into the system and sell them there for dollars – more funding options should be online shortly.
- Next, you need to mint some KAU, as this is how new metal is brought into the vaults.
- So you transfer dollars into the mint, which is the interface where you can pay the market maker for bars of gold or silver. The smallest amount you can mint is 100 grams of gold or 200 ounces of silver, and as I write this the market price for 100 grams of gold is $5,751. So you pay this to the market maker and get a notice you will receive the KAU shortly in your account.
- Now, the market maker takes a 100 gram bar of gold and physically moves it into the Kinesis vault. Once there, you are credited with 100 KAU. The metal on the blockchain always matches the metal in the vaults, down to the gram.
This seems complicated, but minters are rewarded for bringing more metal into the system. They get the holder’s yield like everyone else while holding the metal, but once they spend or transfer it they become eligible for the minter’s yield, which is a perpetual yield based on how much each user has minted.
Who doesn’t want a trickle of precious metals dripping into their account for the rest of their lives?
Making it More Concrete: Payments
Now, you’ve got KAU in your wallet, and you want to pay me $1,000 to design a web site and do some design stuff for you:
- First, I send you my account address, or you scan my QR code, or you just use my e-mail address.
- You send me a payment of 17.38828 KAU (equivalent to $1,000 as I write this.) This can be entered as dollars or KAU, and the Kinesis app will do the conversion automatically.
- I receive the full $1,000 worth (17.38828 KAU), but you’re assessed an additional 45 basis points as a transfer fee. This is another $4.50 equivalent, or 0.07827 KAU. This fee goes into the “Master Fee Pool,” where all transfer fees accumulate over the month.
- At the end of the month, the master fee pool is paid out to everyone who participates in Kinesis: Kinesis gets their cut, partners like PosGO in Indonesia get a cut of the fees their users generate, minters get a yield, holders get a yield, referrers get a yield, etc.
Kinesis means “movement” in Greek. The velocity of money feeds Kinesis’ profits, and our yields. Every user of Kinesis has aligned interests. We all succeed together.
So, How Much are the Yields?
We are still early, as yields started paying out this year. The short answer is “it depends on the transactions that month.” The longer answer is that it looks like the holder’s yield is, conservatively (based on June-September), about the equivalent to a 2.2% APR, but this will only go up as Indonesia introduces PosGo (which uses Kinesis KAU as the back-end) and the new debit card provider comes online. Silver is closer to 0.5% per year.
The actual yields in the first holder’s yield payouts were 6.99% for gold (annualized), and 0.48% for silver.
What if I Want to Take Possession of my Metal?
This is easier with Kinesis than with most services. Kinesis explains this well, but the summary is this:
- You can take possession of 100 gram bars of gold or 200 ounces of silver at a time.
- It costs 0.45%, plus a $100 fee, plus shipping and insurance.
- Jim Forsythe, the guy that runs C4SM, has taken possession of silver 200 ounces at a time and 1,000 ounces at a time. The all-in cost for 200 ounces was 8.17% above spot; with 1,000 ounce bars the all-in cost is about 2.5% above spot.
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