Kinesis Silver (KAG) is a digital currency backed by physical silver, designed to combine the stability of precious metals with the utility of modern digital payments. Each KAG token represents one ounce of investment-grade silver stored in secure, audited vaults around the world.

Overview

Kinesis Silver (KAG) operates as part of the Kinesis Monetary System, offering a digital currency fully backed by physical silver. Each KAG token represents direct ownership of one ounce of fine silver (999 fineness) that is stored in insured vaults globally. This system aims to reintroduce precious metals as everyday currency while providing the convenience of digital transactions. ^[1]

The Kinesis system positions itself as "the people's money," providing an alternative to traditional fiat currencies. KAG combines the intrinsic value of physical silver with blockchain technology, allowing users to spend, trade, send, and earn yields from their silver holdings. The circulating supply of KAG is approximately 3.82 million ounces, valued at around $3.93 million. ^[1]

Technology

KAG utilizes blockchain technology to tokenize physical silver, creating a digital representation that can be easily transferred and traded. The technology ensures that each KAG token is directly linked to physical silver stored in vaults, maintaining a 1:1 ratio between tokens and silver ounces. This approach combines the security and immutability of blockchain with the tangible value of precious metals. ^[1]

The Kinesis system includes a virtual card that enables users to spend their KAG holdings for everyday purchases. The card converts digital assets at the moment of purchase, allowing seamless integration with existing payment infrastructure. This technological implementation bridges the gap between traditional precious metal investments and practical everyday currency use. ^[1]

Ownership Structure

A key feature of KAG is its fully allocated ownership model. Unlike some precious metal-backed financial products that may use pooled or unallocated metals, every KAG token represents specific physical silver that is fully allocated and held in the token owner's name. This ownership structure means that KAG holders have direct ownership of the underlying physical silver held in independent, fully insured vaults across the globe. ^[1]

The physical silver backing KAG is managed by Allocated Bullion Exchange (ABX), Kinesis's strategic partner with over a decade of experience in the institutional precious metals industry. This partnership provides institutional-grade infrastructure and expertise to the Kinesis ecosystem. ^[1]

Security and Transparency

Kinesis emphasizes security and transparency through regular audits of its silver holdings. All silver backing KAG undergoes independent, biannual audits conducted by leading commodity audit specialists. These audits verify the full allocation, quantity, and quality (999 fineness) of all silver bars in the system. The audit reports are made publicly available, providing transparency to KAG holders about the status of their underlying assets. ^{[1] [2]}

The physical silver is stored in fully insured vaults distributed globally, reducing geographic concentration risk. This global vault network also facilitates the redemption process, allowing users to take physical delivery of their silver from localized redemption hubs across six continents. ^[1]

Yield System

One distinctive feature of the Kinesis ecosystem is its yield system, which allows KAG holders to earn returns on their silver holdings. Users can earn yields through various activities within the ecosystem, including spending, holding, or trading KAG. These yields are paid monthly in physical silver, providing a passive income stream from what would traditionally be a non-yielding asset. ^[1]

The yield system creates an incentive for active participation in the Kinesis ecosystem, as users can earn returns not just from potential appreciation in silver prices but also from the utility of their KAG holdings within the system. This approach aims to combine the store-of-value properties of silver with income-generating capabilities. ^[1]

Spending and Utility

KAG offers practical utility through the Kinesis Virtual Card, which allows users to spend their digital assets for everyday purchases. The card converts KAG and other supported assets at the exact moment of purchase, enabling seamless integration with existing payment networks. This functionality transforms what would typically be an investment asset into a practical medium of exchange. ^[1]

Additionally, Kinesis offers a cashback program that rewards users with up to 2% in gold on purchases made with precious metals or cryptocurrencies, up to $480 per year. This incentive structure encourages the use of KAG and other Kinesis assets for everyday transactions, further enhancing their utility beyond simple investment vehicles. ^[1]

Redemption Process

A fundamental aspect of KAG's value proposition is the ability to redeem the digital tokens for physical silver. KAG holders can redeem their tokens for the underlying investment-grade silver bullion at any time, with a minimum redemption quantity of 200 ounces. The redemption process is facilitated through localized redemption hubs across six continents, making physical delivery accessible to users worldwide. ^[1]

This redemption capability distinguishes KAG from purely digital assets by providing a direct link to physical silver. It also serves as a trust mechanism, as the ability to redeem tokens for physical metal reinforces the backing of each KAG with real silver. ^[1]

Relationship to Other Kinesis Products

KAG is part of a broader ecosystem that includes Kinesis Gold (KAU) and Kinesis Velocity Tokens (KVT). While KAG is backed by silver, KAU is backed by gold at a ratio of 1 KAU to 1 gram of gold. KVT, on the other hand, is a utility token that provides holders with a share of transaction fees generated within the Kinesis ecosystem. ^{[1] [3] [4]}

These complementary products create a comprehensive monetary system based on precious metals, offering users options for both gold and silver-backed currencies along with potential revenue sharing through KVT. The integration of these products within a single ecosystem enhances the utility and network effects of each individual token. ^[1]