Today Kinesis sent out the first holder’s yield payments. For the first time in history physical gold and silver produce a yield.
Let’s define what we’re talking about
What is Kinesis?
Kinesis is an asset backed digital currency. Kinesis has two components:
- Vaulted precious metals storage. Allocated, audited, insured, deliverable, and stored in 8 countries to minimize the risk of a country opting to confiscate bullion.
- The distributed ledger. This enforces transaction fees which make today’s yield possible, but it also turns metal sitting into a vault into a modern sound money. You can send money world-wide in 2-3 seconds, or transfer your precious metal assets to a VISA debit card to make payments in the real world (see below). If you’re a crypto investor, you can use physical gold and silver as the ultimate stable-coin with Kinesis.
Kinesis uses KAU, which represent grams of gold, and KAG, which represent ounces of silver, as their native currencies. These can be divided into hundred-thousandths, making Kinesis usable as a currency for purchases of any size.
What is a yield? Do you mean interest?
Conceptually, Kinesis acts like a savings account, denominated in gold or silver, that earns monthly interest payments (also paid in gold and silver). It’s real money, and real savings.
No interest is involved though. Kinesis uses transaction fees instead, and this is where people get confused.
Kinesis explains this more clearly than I can. Click play and you’ll understand this in 2 minutes:
How much yield are we talking about here?
I bought my first gold and silver in Kinesis in the last week of April. So, a bit over 5 months ago.
For most of this time, I’ve had about 100 grams of gold and 700 ounces of silver stored in Kinesis. This is split between my KMS (online) account and a cold wallet (for offline storage). Today the cumulative yield was paid, and in total I received:
- 2.9 grams of gold
- 1.27 ounces of silver
This comes to 2.9% of my gold holdings (KAU), and 0.18% of my silver holdings. Annualized, this comes to 6.96% for KAU 0.44% for KAG. In a negative interest rate world, I am receiving the equivalent of a 7% APR on my gold holdings.
This sounds too good to be true
I get that a lot, and I get a lot of down-votes on Reddit because folks assume this must be a scam. Here’s the truth:
Kinesis has combined the blockchain with physical gold and silver to create a modern Sound Money. The yield is sustainable and incredibly low risk because transfer fees are assessed when transfers are made, and this is then returned to all users of the system.
The yield is variable – it’s totally based on the velocity in the system – but it’s there, and it’s legitimate.
What will drive future yields?
Primarily two things:
- VISA Debit card transactions. These are currently offline because Kinesis is transitioning to a new card provider, and this has taken longer than any of us thought it would. As soon as this functionality is back, and EU and British users can get a physical card in addition to us in the USA, then first-world transactions will drive velocity and drive yields.
- Indonesia is the 4th largest country by population, with something like 200 million unbanked people. Kinesis has worked with the Indonesian Government to put out a branded version of Kinesis (kind of – I’m simplifying here) that will be encouraged so that any Indonesian with a phone can save and spend money. It will also be accepted at all post offices, which is where Indonesians pay their utility bills. This will be announced whenever the Vice-President of Indonesia decides to pull the trigger, as he wants to personally announce it.