Coin Report #76: Kira Network

N.B: In the spirit of full transparency, the following Coin Report update on Kira Network is a Sponsored Post.

Welcome to the 76th Coin Report. In today’s report, I will be assessing the fundamental and technical strengths and weaknesses of Kira Network. This will be comprised of an analysis of a number of significant metrics, an evaluation of the project’s community and development and an overview of its price-history. The report will conclude with a grading out of 10. I hope you enjoy the read!

Introduction

For today’s Coin Report, I will be taking a look at a relatively new project that deals with some novel mechanisms: Kira Network. There is plenty of material to work through here, so I will refrain from any preamble.

I hope this report will prove objective where it must be and fair on more subjective matters. For those who’d like to learn a little more about Kira Network prior to reading this report, here are some primary links:

Fundamental Analysis

General:

Name: Kira Network

Ticker: KEX

Token Type / Hashing Algorithm: ERC-20 until Mainnet (Multi-Bond Proof-of-Stake consensus)

Sector: DeFi Infrastructure

Exchanges: Uniswap, BitMax, Bilaxy, Hoo and AEX

Launch Overview

Kira Network is a Layer 1 network enabling market access to any digital asset in the cryptocurrency ecosystem. Users can earn block and fee rewards from staking any digital asset on multiple chains at the same time, while maintaining full liquidity and custody over their funds, whether trading on KIRA or using other DeFi apps simultaneously. It is intended to be built as the powerhouse of the Web3 economy, facilitating access to uncapped value of the liquid assets at stake.

Kira Network is a financial hub hosting and securing parachains operating decentralized finance applications. All applications running on KIRA gain instantaneous access to the value of all staked assets, which remain fully liquid in the form of staking derivatives. KIRA’s security increases with the growing number of tokens deposited and staked which also includes real world assets and not only cryptocurrencies.

The project was conceptualised in 2019 and launched in Q4 of that year, developing a novel mechanism for crowdfunding dubbed an Initial Validator Offering, which allowed investors to mine a new token by staking an existing token instead of liquidating their assets. Kira Network also proposed a novel consensus mechanism: Multi-Bonded Proof-of-Stake.

The project initially raised funds for early development with seed and private sale, offering their token, KEX, in exchange for capital.

Around $3.6mn was raised across these two rounds in exchange for a cumulative 24.67% of the maximum supply of 300,000,000 KEX. A further $1.37mn was raised via the public offering for 4,000,000 KEX at an average price of $0.34 per KEX. KEX was launched on the ERC-20 standard but will be subject to a token swap to native KEX upon launch of the mainnet later this year.

Price-History Overview

As KEX has only been trading for around three months, there is very little price-history available, but I will endeavour to cover what I can in detail in the Technical Analysis section. For now, it will suffice to say that the all-time low formed in early January against BTC at 531 satoshis, with its all-time high printing at 4958 satoshis in mid-February. Against the dollar, the all-time low formed at $0.18, with its high coming in at $2.60.

Project Overview

Kira Network is seeking to facilitate liquid staking of all manner of digital assets on multiple chains, allowing users to retain custody of their assets whilst utilising them interoperably.

As stated in its whitepaper:

“KIRA is a decentralized network, conceptualized and designed by the Kira Core JSC. The codebase (sekai repository) is open sourced at github.com/kiracore and initially maintained by Kira Core with the intention to be fully migrated on-chain and further managed by the KIRA
Network itself, without dependency on continuous codebase maintenance by any centralized entity.

KIRA Network is operated by the independent set of decentralized network actors called Validators, who produce blocks containing the current state of the ledger using Tendermint byzantine fault tolerant consensus protocol. KIRA Network is not owned by any centralized entity, Kira Core JSC or any other entity related to the Kira development or management team holds no power over any of the network operations. No single person or entity regardless if centralized or decentralized can single handedly control the network, regardless of their wealth status or amount of KEX tokens accumulated.

Cryptocurrency space is a highly competitive environment; KIRA Network is designed to provide the minimum set of novel and essential features to ensure its competitiveness and long-term presence in the ecosystem.

● Security – Multi-Bonded Proof of Stake
● Liquidity – Staking Derivatives
● Utility – Exchange Protocol
● Scalability – dApp Sharding
● Sustainability – Governance System
● Upgradability – Contracting System
● Interoperability – IBC & XCMP Protocols
● Expansibility – Initial Validator Offerings“

I look forward to evaluating its progress since inception.

Let’s begin with some Metric Analysis:

Metric Analysis:

Below are listed a number of important metrics, all of which are accurate as of 23rd February 2021. For anyone reading this who has yet to read a Coin Report, it might be worth reading this section of the first report, where any potentially unfamiliar terms are explained. For any terms or metrics specific to this post, I will provide explanations besides the figures.

Metrics:

General:

Price: $1.53 (3150 satoshis)

Circulating Supply: 13,740,114 KEX

Total Supply: 300,000,000 KEX

Maximum Supply: 300,000,000 KEX

% of Max. Supply Minted: 100%

Network Value: $20,991,459 (432.81 BTC)

Network Value at Max. Supply: $458.325mn

Exchange Volume: $2,741,090 excluding wash

Exchange Volume-to-Network Value: 13.06%

Category: Lowcap

Average Price (30-Day): $0.642

Average Exchange Volume (30-Day): $1,492,433

Average Network Value (30-Day): $8,813,807

Average Exchange Volume (30-Day)-to-Network Value: 16.93%

Volatility* (30-Day): -1.554

Average Daily On-Chain Transactions (30-Day): N/A

Average Daily Transactional Value** (30-Day): N/A

NVT*** (30-Day): N/A

% Price Change USD (30-Day): +539%

% Price Change USD (1-Year): N/A

USD All-Time High: $2.60

% From USD All-Time High: –41%

Premine % of Max. Supply: 0

Premine Location: N/A

Liquidity (calculated as the sum of BTC in the buy-side with 10% of current price across all exchanges): 6.31 BTC

Liquidity-to-Network Value %: 1.46%

Supply Available on Exchanges: 2,398,805 KEX (most of which is on Uniswap)

% of Circulating Supply Available on Exchanges: 17.46%

*Volatility is calculated by taking the average price over the given time-period, calculating the difference between it and the highest price and it and the lowest price over that same time-period, and multiplying those figures together. The closer to 0, the less volatility during that period, and vice-versa. Read this for more on volatility.

Supply Emission & Inflation:

Block Reward Schedule: N/A (tokens all minted at genesis but unlocked according to vesting schedule)

Average Block Time: N/A (mainnet not live)

Current Block Height: N/A

Annual Supply Emission: 92,893,319 KEX unlocked in the following 12 months (3347 BTC-worth at current prices)

Annual Inflation Rate: 676.06% decreasing significantly following the first year post-mainnet (~94% for the subsequent year)

Circulating Supply in 365 Days: 106,633,333 KEX

Token Sale:

The following details were taken from this source and this source.

Public Sale Period: 26th November 2020

Total Tokens: 300,000,000 KEX

Total Tokens Available for Public Sale: 4,000,000 KEX

Total Raised: ~$1.37mn

Average Price Per Token: $0.34 (0.000649 ETH)

Total Tokens Sold: 4,000,000 KEX

Token Allocation:

Team: 15% (45,000,000 KEX)
Foundation: 20% (60,000,000 KEX)
Advisors: 7% (21,000,000 KEX)
Public Sale: 1.78% (5,333,333 KEX including bonuses)
Reserve and Liquidity: 26.56% (79,666,667 KEX)
Seed and Private: 24.67% (74,000,000 KEX)
Community: 5% (15,000,000 KEX)

Distribution:

Address Count: 3,586

Circulating Supply Held By Top 10 Addresses: 22.56%*

Circulating Supply Held By Top 20 Addresses: 27.14%*

Circulating Supply Held By Top 100 Addresses: 44.55%*

Inactive Address Count in Top 20 (30 Days of No Activity): 4*

*Calculated as a percentage of circulating supply and excluding team and exchange-controlled addresses.

Analysis:

There’s plenty to cover for Kira Network and I’d like to begin by looking at the General metrics before looking at Supply Emission and Inflation and concluding with some Distribution analysis:

Beginning with Volatility, Kira Network came in very high with a 30-day figure of -1.554, which places it highest among prior reports. This is undoubtedly indicative of the Dollar pair for Kira Network being in the midst of a new cycle, which is something I will cover in depth later in the report.

Moving on, let’s take a look at the two Liquidity-related metrics:

For buy-side Liquidity, I calculated that there was 6.31 BTC of buy support within 10% of current prices across listed exchanges, equating to 1.46% of its Network Value. This is very much an impressive figure, placing it in the top tenth among previous reports. Clearly, there is demand here at current prices.

Looking at the sell-side, I calculated there to be 2,398,805 KEX available for purchase directly on the orderbooks, equating to 17.46% of the circulating supply. Most of this is listed on Uniswap, as opposed to centralised exchanges. This is significant supply listed in the books, placing it 2nd-highest. Though, much of this is provisioned by the team for liquidity purposes and thus not necessarily indicative of overwhelming desire to sell by current holders.

Before I move on from the General metrics, let’s take a look at those related to volume:

Kira Network traded $2,741,090 of Exchange Volume (accounting for wash) over the past 24 hours, equating to 13.06% of its Network Value; a strong figure. More impressively, its Average Daily Volume for the past 30 days was $1,492,433, equating to 16.93% of its Average Network Value for the same period. This is again among the top tenth of figures recorded in these reports and is highly indicative of speculative interest.

Now, with regards to Kira Network’s supply emission, it is dictated by the vesting schedule. Using this schedule, I found that ~106mn KEX are expected to be liquid around a year from now, meaning that supply emission for year one is 92,893,219 KEX, or 2926 BTC at current prices. That puts annual inflation at 676% for the first year (dependent on the actual date of mainnet launch), declining each year thereafter, with year two inflation at around 94%. Until mainnet launch, 5mn KEX are unlocked monthly, equating $7.6mn-worth at current prices. This isn’t particularly great for speculators, but more important than the supply emission alone is its relationship with traded volume and liquidity.

Given that ~93mn KEX will be unlocked in year one post-mainnet, we can work out that the average daily supply emission is 254,501 KEX, or 8 BTC-worth at current prices. This equates to $388,797 of daily unlocks, on average. As Kira Network traded ~$2.74mn of real volume over the past 24 hours, and an average of $1.492mn of real volume daily for the past month, we find that Kira Network’s average daily supply emission is covered 7x by its 24-hour volume and 3.8xx by its Average Exchange Volume. However, buy-side Liquidity of 6.31 BTC would not be sufficient to soak up the ~8 BTC of daily token unlocks were they to be dumped onto the market. To be clear, this is unlikely to be the case, as those token unlocks encompass a wide variety of allocations, but this is something to be wary of for early investors looking to potentially hold long-term; the year-one inflation is not appealing, in my opinion.

Let’s wrap up this section with a look at Distribution:

Looking at the Kira Network rich-list, I found that there were 3,586 holders, which places it in the top third among prior reports.

Of these holders, the top 10 addresses control 22.56% of the circulating supply; the top 20 control 27.14%; and the top 100 control 44.55%. These figures are excluding team and exchange addresses. Team and exchange addresses collectively control 288.5mn KEX among the top 100, which is most of the supply and most of which is locked out of circulation until the mainnet launch allows for vesting to begin. There are 10mn KEX stored on BitMax and Uniswap addresses, which is the bulk of the circulating supply.

Now, regarding the activity of the top 20 non-exchange/team addresses over the past 30 days, 4 of these were inactive for that period. Of the remaining 16, 13 addresses were in accumulation and 3 in distribution, with cumulative net outflows of -1,303,641 KEX over the 30-day period, equating to ~10% of the circulating supply. However, most of the outflow (~2.57mn KEX distributed) can be attributed to a single address: the fifth-richest, which may be team controlled but unlabeled.

That concludes my evaluation of relevant metrics for KEX.

Let’s now take a look at the Kira Network community:

Community:

There are two primary aspects of community analysis: social media presence and Bitcointalk threads. I’ll begin with the former before moving on to the latter.

Social Media:

Concerning social media presence, there are four main platforms to examine: Twitter, Facebook, Telegram and Discord.

Kira Network is present on two of these platforms: Twitter and Telegram. To begin, let’s look at the various social metrics that I calculated from the Kira Network Twitter account:

Twitter Followers: 11,781

Tweets: 477

Average Twitter Engagement: 1.06%

Facebook Likes: N/A

Facebook Posts (30-Day): N/A

Average Facebook Engagement: N/A

As usual, I will be using RivalIQ‘s social benchmark report for evaluation purposes.

Twitter:

Kira Network has a modest Twitter audience of 11,781 followers, which places it 22nd-highest among coins previously reported on. However, its engagement is fairly strong at 1.06%, placing it in the top half of prior reports. Moreover, this is 23.6x greater than average across all industries of 0.045% and 39.3x greater than the average in the Tech and Software industry of 0.027%. Given that the project is still in its infancy, I am glad to see strong engagement with the content being published here, as well as a commitment to consistency in interaction with the community. I hope to see this continue and I’d expect to see Kira Network grow its audience significantly over the coming months, particularly following its mainnet launch.

Facebook:

There is no Facebook group for Kira Network.

Discord:

There is no Discord group for Kira Network.

Telegram:

There are 8,001 members of the Kira Network Telegram group.

Below, I have provided my key takeaways from recent activity in the group:

There is a decent amount of daily activity, with discussion present ever day, if not 24/7.
The mainnet is scheduled for launch in April.
The staking module will be available following the mainnet launch.
Kira Network is planning to integrate within Binance Smart Chain following the mainnet launch, with a bridge expected in Q3 2021.
The community seem genuinely interested in the implications of the technology being developed as opposed to just the price of the token, which is great to see.
The team are actively involved in discussions with the community; again, great to see this commitment.

Beyond this, there are 6 other Telegram groups for international communities, with cumulative membership of over 20,000.

BitcoinTalk:

There is no BitcoinTalk thread for Kira Network.

It is a shame that whilst the team’s commitment to social media is apparent, manifesting in a growing and engaged community, this has not been extended to other relevant platforms beyond Twitter and Telegram, particularly in the cases of Facebook and Discord, which are key crypto hubs.

And that concludes my evaluation of the Kira Network community.

Let’s now take a look at its developmental progress.

Development:

For the following Development analysis, I will be evaluating project leadership, the whitepaper, the roadmap, available wallets and finally providing a general overview of developmental progress:

Project Leadership:

The Kira Network team is comprised of 16 employees as per LinkedIn, with 12 employees listed on the website, alongside 4 advisors. The team do not currently appear to be hiring.

More specifically, the core team consists of:

And the advisory board comprises:

Whitepaper:

Whitepaper

The whitepaper is 25 pages in length and can be found in the link above. Below, I have provided my key takeaways from the document:

Kira Network is expected to be a fully decentralised network that is self-governed and economically self-sustainable.
There are eight primary features being developed by the team for incorporation within Kira Network: security via Multi-Bonded Proof-of-Stake; liquidity via Staking Derivatives; utility via an Exchange Protocol; scalability via dApp Sharding; sustainability via a Governance System; upgradability via a Contracting System; interoperability via IBC and XCMP Protocols; and expansibility via Initial Validator Offerings.
The security of Kira Network grows as digital assets are staked on the network (more Total Value Locked, more security), with no limits on how much value can be staked nor which kinds of digital assets can be staked.
The network is designed to allow users to retain full liquidity of their staked assets by supporting staking derivatives issued at 1:1.
The Interchain Exchange Protocol will be the first dApp being built on Kira Network, which will be a permissionless DEX that provides access to the entire digital asset space, with both automated market making and orderbook functionality.
To ensure scalability, Kira Network will utilise sharding, with uncapped value at stake shared between uncapped numbers of validators.
The governance system for the network will control the economic policies, including inflation rate, interest rates, fees etc.
Kira Network will integrate CosmWasm smart contract support alongside on-chain contracting to ensure that the network can continue to be upgraded.
The network will be interoperable, allowing for trustless staking of any digital asset, facilitated by Cosmos IBC and Polkadot XCMP. Value will be free to be transferred across all possible blockchains and applications supported by interoperability protocols.
Initial Validator Offerings will be offered to any and all new projects, allowing these projects to crowdfund whilst retaining capital liquidity. These allow investors to mine the new token being offered by staking another token with a validator and receiving the block rewards proportional to the amount staked.

Roadmap:

Roadmap

The Kira Network roadmap can be found natively on the website linked above and is presented as a brief chronological timeline beginning with the project’s inception in Q3 2020 and concluding in Q1 2022.

One thing I’d like to mention to begin with is that the roadmap could be a little more detailed, or at least provide further reading links to the goals presented, as some of them may be abstruse to website visitors and thus potential new users. That said, the specificity of the roadmap is appreciated, where other projects are often quite vague in their public goals.

Beginning with Q3 2020, Kira Network hosted both a seed and private round to fundraise for development, which was followed by the launch of an internal testnet.
Subsequently, in Q4, the public crowdfunding round began with their novel Initial Validator Offering, followed by the launch of the private testnet and KEX Liquidity Program.
In Q1 2021, the team has been working on the public testnet, as well as the governance module and Kira Network Manager, which is part of phase 0 of its testnet development.
Moving into Q2 2021, Kira Network is expecting to launch its mainnet, with the release of Kira Hub, the Kira Saifu Signer and interconnection with Cosmos.
As we get to Q3 2021, the team are planning to integrate Kira Network within Binance Smart Chain, as well as launch Multi-Bonded Proof-of-Stake on the mainnet, where until that point it will operate on Proof-of-Authority consensus. they will also be releasing their Order Book Module.
In Q4, we can expect integration with Ethereum, as well as the launch of the Token Issuance module and NFT Staking.
Finally, in Q1 2022, the team will be working on sharding for the Interchain Exchange Protocol (IXP), as well as integration with Polkadot and the release of CosmWasm Smart Contracts.

More detail is available on these goals for those that read Kira Network’s blog updates, which I will cover a little later, but it would be great to perhaps have relevant reading either linked or briefly summarised within the roadmap for maximum accessibility to potential new users.

Wallets:

As KEX is currently an ERC-20 token, it can be stored on any ERC-compatible wallet, including hardware wallets such as Ledger and Trezor, as well as mobile wallets, desktop clients and web wallets. Post-mainnet, a bridge will allow for interoperability between native KEX and ERC-20 KEX.

Developmental Progress:

As Kira Network is a project in its infancy, it is unsurprising that the primary goals set forth by the team are yet to be accomplished, with the bulk of these expected to be completed this year. As such, I thought I’d take this section to briefly elaborate on what we can expect from Kira Network going forward:

The Kira Network mainnet is expected to be released in 8 phases, excluding phase 0 (testnet development).
Phase 1 will see the public launch of the mainnet with proof-of-authority consensus and a governance module, establishing rules for the integration of new validators.
Phase 2 will enable staking of KEX, as well as the establishment of fiscal policy by validators.
Phase 3 will see the mainnet integrated with Ethereum, Cosmos and Binance Smart Chain, whilst also launching support for asset exchange on the Interchain Exchange Protocol.
Phase 4 will integrate Multi-Bonded proof-of-stake consensus, with the governance system in full control of all possible fiscal policy.
Phase 5 will see the launch of sharding, as well as support for validators to remain legally compliant by censoring transactions according to legal requirements.
Phase 6 will allow for on-chain contracting modules that will help improve network functionality.
Phase 7 will integrate support for CosmWasm and facilitate scalable smart contract and Dapp deployment.
Phase 8 will see Kira Network function independently, with the expectation that users will pay more in fees to the network than the inflation of KEX alone is generating, thus allowing for income generation beyond supply emission.

And that concludes my fundamental analysis on Kira Network.

Let’s take a look at its price-history in conclusion of this report:

Technical Analysis

KEX/BTC

KEX/USD

*This analysis is accurate as of 20th February 2021.

As can be seen in the above charts, KEX has only been trading for a few months and thus there is limited price-history available, but we do appear to be within the midst of its first major cycle.

If we begin by looking at KEX/BTC, we can see that the pair began by trading into 1755 satoshis where resistance was found, with price then slowly bleeding into the all-time low at 531 satoshis over the course of a couple of months. The pair formed a base here in early January, from which the reversal into a bull cycle began, with KEX rallying through January back into the then-all-time high at 1755, where it failed to break through on the first attempt. Following a three week consolidation below this high, the pair finally broke through in the second week of February, retesting the level as support and ultimately climbing higher into the all-time high at 4958 satoshis a few days ago. It has since fallen off a little and appears to be forming a higher-low at 3,000 satoshis. If we take the trend-based fib extension, the next target for the pair is 6233 satoshis, should it break through that all-time high on the retest.

Turning to KEX/USD, unlike for other projects that have significant price-history, both the KEX/USD and KEX/BTC charts look almost identical, so there isn’t a great deal to add here. One thing to notice is that the pair spent almost two months in a tight accumulation range between the all-time low as range support at $0.18 with range resistance at $0.32. The breakout from that range resistance has led to a near 9x rally into the all time high and the pair doesn’t look like stopping just yet. The rally is beginning its parabolic curve and I’d expect to see the 100% extension at $3.43 hit sooner rather than later. For those on the sidelines looking to enter a position, buying a sweep of the most recent swing-low at $1.69 would be the most opportune entry, followed by a retest of $1.26 as an area to compound; alternative, if the pair breaks to a new all-time high, a breakout entry with a stop on a daily close below $1.69 would make sense too.

And that concludes my evaluation of Kira Network.

Conclusion

This report is now over 4,000 words, and it is time to draw it to a close.

My final grading for Kira Network is 7 out of 10.

Here, you can find my grading framework, for reference.

Lastly, here is a link to a Google Sheets file with any significant data from previous reports compiled for cross-comparative purposes. I will keep this updated as I continue to write these reports.

I hope this report has proved insightful and that you’ve enjoyed the read! Please do feel free to leave any questions in the Comments, and I’ll answer them as best I can.

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