Kinesis Yields and the KVT Token

Another token created out of thin air that promises high yields

Dec 24, 2022

In addition to gold ($KAU) and silver ($KAG) tokens, Kinesis Money also issues the “Kinesis Velocity Token,” which they describe on their website as follows:

Unlike $KAU and $KAG, KVT tokens are ERC-20 standard, which means data regarding their supply, transaction history, unique addresses holding the token, and amount held by each address is public information that is easy to obtain with Etherscan or any other Ethereum block explorer. Etherscan provides the following details about the KVT token:

Contract address: 0x3a859b9ea4998D344547283C7Ce8EBc4aBb77656
Token decimals: 0
Total supply: 300,000
Unique addresses: 905
Transactions to date: 16,142
First transaction: September 10, 2018
KVT controlled by the top 5 addresses: 39.9%
KVT controlled by the top 10 addreses: 54.5%
KVT controlled by the top 20 addresses: 71.9%
KVT controlled by the top 50 addresses: 92.0%

Although 905 unique addresses is already a very small number for a token project of any significant size, scale, or adoption level, we can see that only 10 addresses control more than half the total supply, and only 42 addresses control more than 90%.

From the description on the website and the video below, we learn that the incentive to hold KVT is to receive 20% of the “Kinesis Master Fee Pool.”

According to the video above, “KVTs entitle the hotel to the largest of all the fee sharing yields offered by Kinesis at a proportion of 20% share of all the transaction fees acumulated in the Master Fee Pool.” That is true only if the 46.8% of total fees allocated to “Kinesis & Partners” is ignored.

In addition to the yield paid to $KVT holders, the Kinesis website describes four other types of yields users can earn. The minter’s yield (5%), the holder’s yield (15%), the referrer’s yield (7.5%), and the velocity yield (10%). Adding these four yields together with the KVT yield (20%) totals 57.5%, leaving 42.5% unaccounted for. This raises a question, how was 46.8% of the Master Fee Pool allocated to “Kinesis and Partners” if 57.5% of the Master Fee Pool is earmarked for minters, $KAU and $KAG holders, referrers, $KVT holders, and the velocity yield? This 4.3% discrepancy is equivalent to just over $1 million of the Master Fee Pool that has been accumulated to date.

Another question, if the $KVT token is an Ethereum ERC-20 token on the Ethereum mainnet and the $KAG and $KAU tokens are issued on Kinesis’ own fork of the Stellar blockchain, how exactly is the 20% of the Master Fee Pool dedicated to $KVT holders paid back to them monthly? There is no explanation for this on the yields or $KVT section of the website, nor is it explained in the “Kinesis Yield Guide.” Doesn’t this dual blockchain architecture add significant complexity to an already overly complicated system—two asset-backed tokens, a yield token, and six different yields?

How many $KVT tokens do Kinesis and related parties control, and exactly how much of the total fees generated end up back in the pocket of “Kinesis & Partners”? With currently available information, it’s impossible to determine

In conclusion: Another token created out of thin air promising high yields with a significant proportion of the total supply controlled by a small number of addresses, questionble volumes, little transparency and numbers that don’t add up.

Where else have we seen this story before?

🚩 Offshore jurisdiction (Cayman Islands)
🚩 Token created out of thin air promising high yields ($KVT)
🚩 Token appears to meet the criteria of a security ($KVT)
🚩 Majority of tokens are concentrated in a small number of addresses
🚩 Centralized fork of another blockchain with little to no transparency
🚩 Incomplete and infrequent audits
🚩 Misrepresentation and false claims related to audits
🚩 Implausible trading volumes
🚩 Blackbox CEX

More research is needed to determine how many skeletons are hidden on the Kinesis Blockchain, but it's clear that Kinesis Money shares many characteristics with previous blockchain projects that turned out to be various types of scams, including Ponzi schemes.

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