Before we start, let me preface that I have been involved in the cryptocurrency space since 2012 and have profited considerably off of Bitcoin and Ethereum. I write these analyses in order to disseminate information regarding cryptocurrency to the wider community. I would also like to state that I do own Kucoin Shares, but in no other way am I affiliated with Kucoin. click here to signup
While there is always some reason for apprehension when it comes to dealing with new cryptocurrency exchanges, Kucoin Exchange is embarking on a very bold plan. Running a cryptocurrency exchange within China is not prohibited or illegal by any means, even though servicing Chinese customers can prove somewhat difficult these days. That is, until the new regulations go into effect, which could happen virtually any day now. When it comes to Chinese exchanges, no one knows for sure what the future will hold.
KuCoin isn’t too bothered by the current regulatory landscape, as the company is mainly interested in attracting foreign users. Although we have seen some other companies attempt to do the same, it will be interesting to see how these ventures play out in the long run. There is a global demand for cryptocurrency, after all, and nothing has been set in stone just yet.
What makes this new exchange so appealing is how it will support some interesting cryptocurrencies from day one. Bitcoin is included, of course, as are Litecoin and Ethereum. As one would expect from a Chinese company, KuCoin will also support NEO and its GAS token, as well as a handful of other currencies. Some of the choices may be considered somewhat controversial, though. Considering the crackdown on ICOs, the listing of a fair few ERC20 tokens is not necessarily the best decision.
All of this seemingly confirms that the new exchange will not focus on fiat currency trading, at least for the time being. That may be a smart decision, as there is always a need for crypto-to-crypto exchange competition. Indeed, many users want to exchange between different cryptocurrencies rather than fiat currency itself. Whether or not we will see more currencies or perhaps even fiat trading added in the future remains to be seen.
One interesting aspect of this new platform is how it will issue its own KCS token bonus plan. It is very similar to Binance in this regard, as these “shares” will be used to redistribute 50% of all platform trading fees to the users. It is an interesting way to generate passive income, especially when considering there are “only” 100 million KCS in existence at any given time. Every token is currently valued at slightly under US$0.60, which could easily turn it into a solid investment opportunity.
While this exchange boasts a similar platform to the Binance exchange, I believe that Kucoin (Bitcoin Exchange: Bitcoin, Ethereum, Litecoin, KCS) will surpass Binance for a number of reasons:
- Binance Coin (BnB) currently has a market cap os $120M (Binance Coin (BNB) price, charts, market cap, and other metrics | CoinMarketCap) and simply allows users to mitigate their transaction fees, while Kucoin Shares allows investors to become direct stakeholders in the success of the exchange. The dividend structure allows investors to receive 50% of all of the daily transaction fees that is performed on the exchange. A schematic of how this structure works is shown below:
The platform additionally offers a wide range of technical indicators as shown below:
and is continually adding new coins to their exchanges, such as below:
2. Kucoin offers a referral system that allows referrers to directly receive a portion of their referees’ transaction fees, providing incentives for growing adoption.
3. By purchasing Kucoin shares and trading on the Kucoin Exchange, investors’ ROI will be determined by both the appreciation of KCS and from the dividend payouts. Given that Bnb (a useless coin) has seen a return of 4X from Kucoin’s current state, the prospects of Kucoin shares remain remarkable.
4. In the white paper, a buy-back mechanism is proposed of the Kucoin Shares “After the Kucoin platform opened for use, at least 10% of the net profit will be applied to the buy-back of KCS every quarter. The KCS retrieved through buy-back will be destroyed immediately. The buy-back record shall be released to the public at the first time, so that users can review via blockchain explorer, to ensure the open and transparent nature of the whole process. We will continue our efforts in this regard, until 100 million KCS destroyed.”
This buy-back and destruction of coins will decrease the supply of circulating coins, leading to the appreciation of value of current coins.With more and more exchanges creating their own currencies and tokens these days, a new era is dawning as we speak. Whether or not there is a point to all of these native tokens being issued lately remains to be seen. While the bonus scheme won’t necessarily hinder the chances of success for this new currency, it may result in the platform becoming very popular very quickly and subsequently losing traction shortly afterward. These new tokens will give the platform some value for long-term growth, though, and interesting things may happen for KuCoin in the near future.
While most cryptocurrency investments are speculative, Kucoin exchange allows investors to purchase Kucoin Shares (KCS), which is similar to owning the shares in a company on the stock exchange. This exchange offers a sustainable business model to pay dividends to investors (unlike other ponzi schemes such as Control Finance which recently imploded). Kucoin reimburses 50% of the exchange’s transaction fees to shareholders on a daily basis, thereby generating a mode of passive income for the stakeholder. Most importantly, it offers the cheapest transaction fees of all exchanges (0.02%).
Development Plan and Timeline
Oct 2017, Global promotion started.
Nov 2017, Mobile apps (Android, iOS) released.
Dec 2017, Over 50 mainstream cryptocurrency exchange pairs listed, daily exchange volume expected 5,000+ BTC.
Jun 2018, Cryptocurrency exchange pair self-releasing feature available.
Dec 2018, 1,000+ cryptocurrencies list, daily exchange volume expected 100,000+ BTC.
Jun 2019, One of the Top 10 worldwide cryptocurrency exchange platforms.
Michael Gan (CEO)
Former technical expert of Ant Financial (Alibaba Group) with a good understanding of financial solutions similar to Alipay. He has successively held the posts of senior partner in several famous Internet companies like MikeCRM.
Eric Don (COO)
Senior Researcher of the Internet and Systems Architect. He has accumulated over 10 years of experiences in working and starting businesses in the Internet industry and successively held the posts of CTO and senior partner of famous IT companies including Youling, Fengzheng Lianxian and Ruiyun Wulian, etc.
Top Lan (CTO)
Technical expert of the Open Source Community and manager of several popular open source projects in github. He has accomplished the design and deployment of Kucoin financial trading system.
Kent Li (Operation Director)
Expert of operations development and successively held the posts of Operation Director and architect in several Internet companies. He is also the regional Operation Supervisor of the REAP project initiated by Stanford University in Asia.
John Li (President of the Business Operations Group)
President of Jianbang Communication and Project manager of famous domestic group-buying website. He is in charge of over 30 group-buying service centers around China with his main focus on consumer finance.
Jack Zhu (Marketing Director)
Operations Director of the southwestern market of iBOX PAY. He is in charge of a marketing team with over 300 employees.
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