How minting causes tight spreads on the Kinesis Exchange

Sam Briggs

1st July 2020

How minting causes tight spreads on the Kinesis Exchange

Tight spreads enhance liquidity for gold and silver bullion traders and investors. The Kinesis Exchange currently offers some of the tightest spreads available in the entire precious metals industry.

The root cause of this phenomenon is minting, a process unique to the Kinesis monetary system. Widespread minting activity is tightening spreads on the Kinesis Exchange, enhancing liquidy in the process.

But, how exactly does that work?

What is minting?

First of all, we need to explain minting.

Minting is the profitable process of creating your own Kinesis gold bullion and silver bullion based digital currencies, KAU and KAG. A minter effectively becomes their own central bank, bringing new KAU and KAG into the Kinesis monetary system.

When users mint KAU and KAG, they purchase the underlying physical bars of allocated gold and silver bullion. The newly purchased bullion sits in insured and independently audited world-class vaulting facilities, with no storage fees, ever.

All storage fees are eliminated by a share of global transaction fees charged across the Kinesis system, and the robust infrastructure of Kinesis’ bullion vaulting network, covering all major trading hubs globally.

How is minting profitable?

All minted Kinesis gold and silver bullion based digital currencies, which are then transacted through the Kinesis system, earn the minter a monthly yield of physical gold bullion and silver bullion paid into their Kinesis account – for life. We call this the Minters Yield.

The Minters Yield is calculated from a proportionate 5% share of global transaction fees, across the entire Kinesis network.

Kinesis minters have the ability to recycle their currency through the minting process, again and again. In this way, a minter can access the Minters Yields on the same capital, as many times as they choose to mint.

How does minting tighten spreads and increase liquidity?

1) The minting process results in a lot of Kinesis users hoping to offload their freshly minted KAU and KAG on the Kinesis Exchange and activate the Minters Yield on that currency, as quickly as possible.

2) In hope of securing a prompt trade, Kinesis minters offer gold or silver bullion with a personal limit order book, with tight bid-ask spreads.

3) In turn, other Kinesis users and minters on the Kinesis Exchange tighten the spreads offered to remain competitive, which enhances and builds more liquidity.

Minting is a process native to the Kinesis monetary system, and resultantly, its favourable impact on spreads and liquidity is only accessible on the Kinesis Exchange.

Strong liquidity only leads to greater liquidity, delivering a trading ecosystem that benefits traders and investors alike.

A recent, full redesign of the Kinesis Exchange’s interface has made accessing its superior pricing an all-round smoother experience, supported with new, intuitive chart functionality.

With the Minters Yield serving as a powerful incentive to encourage minting activity, the future for the attractive spreads and liquidity on the Kinesis Exchange looks very bright indeed.