KuCoin Shares – Millions of Dollars in Daily Trading Volume
KuCoin is a cryptocurrency exchange based in China that opened in 2017, and currently over 300 different coins have been integrated into the platform and can be traded with each other. Daily trading volume is tens of millions of dollars, indicating that the exchange is quite popular, and has lots of liquidity which provides optimal trading conditions. Users trade cryptocurrency on the KuCoin exchange to profit from market fluctuations, to profit from arbitrage between different trading pairs for the same cryptocurrency, to profit from arbitrage between other exchanges, and to convert lesser known cryptocurrencies into ones that are more easily spendable like Bitcoin. The KuCoin exchange has also launched its own cryptocurrency called KuCoin Shares (KCS).
It was created with the ERC-20 protocol, which has been used for the launch of many popular cryptocurrencies since it has built-in initial coin offering (ICO) technology. With ERC-20, a smart contract is created where users deposit Ethereum and receive a percentage of the newly created tokens. The maximum supply of 200 million KCS was created in the genesis block, and no new coins will ever be mined or staked.
Run on the Ethereum Blockchain
KuCoin Shares uses the highly secure Ethereum blockchain and doesn’t require any additional processing power to maintain its network. 100 million coins were released to the public in the ICO, while the other 100 million were kept by developers and angel investors. This massive amount of coins held by developers is detrimental to the investment risk profile of KuCoin Shares since they will inevitably be sold in the future and suck money out of the pockets of investors and traders.
For every 1,000 KCS held in your exchange account, you get a 1% discount on KuCoin exchange trading fees, and up to a maximum discount of 30% for 30,000 KCS. This is definitely an incentive to hold KCS if you actively use the exchange, but it would take a whopping $100,000 worth of KuCoin Shares to get the maximum discount. Additionally, 50% of KuCoin exchange profits are split up between holders of KCS.
Intimate Connection Between the Coin and the Exchange
Since KuCoin has become a large exchange and continues to grow, this can end up being a very profitable dividend and is worth looking into if you are a cryptocurrency investor. Thus, KuCoin Shares are intimately tied to the popularity of the KuCoin exchange since they provide dividends and trading fee discounts. In the long term KCS price will likely rise as the KuCoin exchange gains momentum, but there is some risk since the developers hold so many coins.
One more factor that will apply upward pressure to price is 10% of exchange profits are used to buyback KCS which are then burned; so far, 19 million coins have been destroyed. Currently KuCoin Shares has a market cap of $306 million with daily trading volume of nearly $1 million, making it one of the most popular and valuable cryptocurrencies.
This is not advice. Advice should be accepted by your chosen legal counsel only and financial advice should come from a licensed or certified financial professional. As always – do your homework and make decisions based on your own education. Seek information and look into projects before adding to or diversifying your portfolios.