Each Silver (KAG) is backed by 1 ounce of allocated physical silver bullion. This allocation is always on a 1:1 ratio, with the allocated legal title remaining to the holder of the currency. This ensures that ownership of the allocated gold always resides with the KAG holder.

The bullion behind the Kinesis real-world asset will never appear on the Kinesis balance sheet, this reduces counterparty risk when choosing to hold your bullion with Kinesis.

The Kinesis team determined that the most effective and fit-for-purpose selection for a blockchain network for the kinesis currency suite was to use the Stellar network forked to form a bespoke blockchain network.

There was one defining objective that needed to be met with this choice, and this is the ability for Kinesis currencies to function as the high velocity, globally used currencies that form the basis for the system that Kinesis is pioneering. Stellar met these primary needs in a number of ways, both technical and algorithmic, but at the core of the decision lies 3 overarching reasons.

1) The speed of the Stellar network

2) Stellar Consensus Model versus Mining Model

3) Stellar Fee Accumulation Model