I just received my first yield from Kinesis – my Minter’s Yield:
It’s not a ton, but considering I only started minting coins in April, 0.65 grams of gold and 0.9 ounces of silver (worth around $62) today seems like a nice payout.
What is this all about?
Kinesis is a project to create sound money again. It’s a mix between a private precious metals vaulting service (allocated, secured, audited, and insured, in vaults run by Loomis and Brink’s in 8 countries) and the blockchain (to track ownership and allows payments in fractions of a gram of gold or an ounce of silver.) There is also a VISA debit card to make usage in the real world simple.
To encourage adoption and defeat Gresham’s Law, Kinesis built its yield system into the blockchain, so every transfer on Kinesis is subject to a fee of between 0.22% and 0.45%. These fees are used to fund Yields, which are paid back to users in varying amounts.
This is the Minter’s Yield, the first to go live on the Kinesis system.
So What is a Minter’s Yield?
Kinesis provides the vaulting, and the servers, and the project development, and all that.
Users own all of the metal in the vaults – it’s not on Kinesis’ balance sheet – it’s ours. So that suggests the question: where do the gold- and silver-backed digital coins come from? Well, we users “mint” them. This means:
- We transfer money into a minting account.
- Once there, we purchase new bars of gold and/or silver to move into the Kinesis vaults. These are 100g bars of gold, or two 100 ozt bars of silver at a time.
- In return, we receive the digital coins – KAU (which represents ownership of one gram of gold) and KAG (which represents ownership of 1 ounce of silver)
- Once we transfer, sell, or spend these coins on a debit card, they go into activation and qualify for the minter’s yield.
Minter’s Yield is 5% of the fees generated in Kinesis. You receive a proportional amount based on how many coins you minted in relation to the total size of the fee pool. This video explains it better than I can:
So, the minter’s yield shown above is my share of the transaction fees people generated with the coins I minted, conceptually. I’ll receive this forever, and as Kinesis grows in size and more people use it for day-to-day transactions I expect this yield to grow proportionally as well. There’s a knowledge base article on how these are calculated if that’s more your thing.
It’s a great day for Kinesis.
How Can I get in on This?
Well, you can sign up for a Kinesis account here.
If you want to know what this is all about, I put together an explainer article to try and summarize what is an ingenious, but somewhat complex system.