DIGITAL ASSET ANALYSIS – KUCOIN SHARES (KCS)
WHAT IS IT?
KCS tokens represent interest in profits from trading fees on the Kucoin digital asset exchange. A uniquely structured market where 50% of fees earned from trading various CryptoCurrency pairs are distributed daily to accounts with KCS tokens held inside the exchange.
Because KCS token holders are given daily earnings in all of the various tokens trading on their platform, the KCS holders are earning small portions of dozens of different coins as their portion of the exchange profits. This new type of investment opportunity is different than any mainstream investment vehicle and is being drastically undervalued at the time of this writing.
The exchange frequently adds new digital assets to their main BTC/ETH/NEO/KCS trading pairs. At the time of this writing there are 56 ETH pairs, 61 BTC pairs, 10 NEO pairs, 8 KCS pairs, and 5 USDTether pairs available. Trading fees from each individual pair are distributed daily, which means KCS holders get a small portion of all traded tokens. This is a powerful form of automated diversification for those braving this new frontier of finance.
WHITE PAPER REVIEW:
The Team:
The Kucoin Exchange and technology development team are based out of Asia, mainly South Korea and China / Hong Kong. Executives of Kucoin hold some impressive resume connections to some of the large mainstream finance and technology institutions in Asia which is important for gaining more mainstream adoption and use. This is a major strength from my perspective. It gives one's DA portfolio some exposure to the huge market potential in the worlds most populated areas. Cryptocurrency adoption is growing rapidly in Asia, where they often times face more favorable regulation environments than USA based projects.
The Token:
KCS tokens have been distributed to project team members (70 million total), Angel Investors (30 million total) and public ICO (100 million total). Team member tokens are locked up for 5 years while Angel Investor tokens are locked up for 2 years. The 5 year lock up for team members shows some rare long term planning and commitment. This is another big positive mark, a team willing to hold their tokens for that long before having an opportunity to monetize them means they will have a very high financial incentive to build a structurally sound and financially secure platform. The long term view is imporant.
There is also a buyback program which is stated to use a minimum of 10% net profits for buying back and burning KCS shares until the long term cap of 100,000,000 achieved. This means 100 million max token supply eventually, another important bit of information to have when analyzing this project. Again, this is a long term strategy which will only benefit those who plan on holding this token for many years.
Future use of the KCS token as the utility token for a decentralized exchange is also in the works. Users of this platform would need to use KCS tokens similar to how ETH tokens are used in Etherdelta and users would be able to trade any token of their choosing by creating their own Trade Pair in the exchange order book.
Most importantly, the exchange requires 2 factor authentication prior to logging into your account and again prior to making any transaction. As we've seen many crypto exchanges be subject to attacks and theft, this is a critical factor to take into account. Any thief that gets into the exchange network wouldn't be able to withdraw any of your funds unless they also had access to your personal google authenticator.
Another impressive feature of this exchange is the volume which it can handle. We've seen the major exchanges like Coinbase frequently taken offline during high volume trading events because their IT infrastructure isn't able to handle the incoming orders. KCS claims to have the capability to process over 1,000,000 orders per second which is many times more efficient than most current exchanges. I've been impressed with the exchanges internal processing speed the several times I've made transactions.
As we begin to enter the Early Adopter phase of the blockchain economy this is another strength in favor of the Kucoin Exchange. Primitive blockchain processing ability is what keeps the original Bitcoin network very slow and expensive. If you're wanting to trade these very volatile markets it's critical your exchange be available even during the high volume drastic price swings. KuCoin is establishing itself as a leader in this area which will lead to more adoption and use by both professional and amateur traders.
Marketing and User Incentives:
The platform marketing strategy and user incentives really put the icing on an already appealing cake. The team executives bring connections to established mainstream institutions while it's aggressive marketing team ensures this exchange will become a household name for anyone familiar with the world of Cryptocurrency. On top of the healthy KCS token profit share the exchange provides they have a large affiliate bonus for people who increase the platform user base. This all sets the Kucoin Exchange up for long term success while providing the KCS token with real value.
Conclusion:
Owning KCS tokens and taking advantage of the profit distribution they earn on a daily basis is very valuable. When valuing this token one has to project in the future growth of the Exchange as well as the projected growth of the various Digital Assets they trade since those are what you're profits are distributed in. We've watched Bitcoin grow to astronomical prices over the last few years, along with other projects like Ethereum and Ripple.
Owning KCS shares could be thought of as having a Mining Mutual Fund where you accumulate a very diverse portfolio of coins in small amounts on a regular basis. Long Term holders will see these small amounts become valuable over time if they are patient. Don't expect to get rich overnight with the profits your KCS will give you, but do expect to earn a healthy return over the next several years as these projects go from the drawing boards into the real economy.
The KCS token is knocking on the door of the Digital Asset Top 100 list as I write this analysis. It's price has more than doubled in the past two weeks and I have the feeling this coins is in the prime position to catch the large momentum wave moving away from exchanges with centralized ownership and profit structures.
I don't see KCS tokens hitting a moonshot anytime soon, but a quick rise into the Top 50 is very possible. This gives the coin an upper price target of around $5.00 up to which I would feel comfortable accumulating.
If you would like to use the Kucoin Exchange and are feeling generous, please use the affiliate link that follows and I will receive one of the generous bonus' the site offers - https://www.kucoin.com/#/?r=E5VLAQ
I'm not offering investment advice. These are my own personal notes and thoughts on a subject which I study that I'm offering to the steemit community in the spirit of the open-source platform.