interface Source<out T> { fun nextT(): T }

have you read the docs on variance?

as I understand, it is a solution in Kotlin to solve generics issue in Java although Java has its own solution

<? extends E> which means ? is a subclass of E

I think it's easier. If E is coming out of the class (ie return types only), it can be an out type. If it's coming into the class (ie parameters) its an in type

but they're related with the type inheritance

They are related. I think you should read the section "Declaration-site variance" in the above link. The names in and out are chosen to reflect what I said above.

It's more about simplifying the implications of defining a generic as

extends

or

super

. When writing in Java, unless you're very familiar with typing constraints, and what it means to allow variance of types, you REALLY have to think/read about when to use

extends

vs

super

. Kotlin is trying to make it easier as one can easily determine if the generic is being used as an

in

or an

out

by reading the definition class, and can use the appropriate modifier. Make sense?