October 28, 2017
Hello,
I am writing to you about a relatively new crypto exchange which I think is getting picked up quite quickly.
This is an exchange based in Hong Kong and has already started to rapidly grow.
It was recently listed on Coin Market Cap and has been added to the blockfolio app.
Currently as I write this, Kucoin is at an all time high at 0.00016999 BTC or (0.97 USD).
It started trading at 0.000032 BTC (about 0.11USD) reaching a high of around 0.000075 BTC on the same day.
In either case, a very nice profit for those who got in early.
A big part to its explosive growth as an exchange is its heavy use of social media to promote it itself.
Similar to Binance, Kucoin has its own exchange token (KCS). Kucoin however will share 50% of its trading fees with its Token holders. In addition to this, Kucoin users are each given a referal link they can use to have other sign on. When a new user signs on with the referral link, Kucoin will also share an additional 40% of the trading fees with the users. So in the end Kucoin only keeps 10% of trading fees when users both buy KCS tokens and give out referral links. Almost sounds to good to be true? This is the part where people may think its a scam or a multi level marketing trick.
However, I don't believe this to be the case. The team is solid and consist of people with solid backgrounds. The CEO has a background from Alibaba, and other Large china based IT companies. The same can be said for many of their staff. They are responsive on Telegram and the CEO himself answers questions on Reddit.
The goal of Kucoin Exchange is to be in the Top 10 Exchanges by June 2019.
In November they plan to release an IOS and Andriod version of their trading platform.
By December they plan to have over 50 cryptocurreny pairs listed.
At the rate they have been listing new tokens, this seems to be an achievable goal.
There are 200 Million KCS tokens, where 100 Million are publicy traded while the other 100 Million is held by them.
Those held by them are mostly locked in which aligns their interest for the long term.
Now, of course there always a chance this is a scam, but based on the points above, I doubt this to be the case.
In fact, I think they are quite smart with their marketing and getting such benefits from their KCS tokens and referral links only help to rapidly grow their operations.
Currently, they are hidden deep inside the coinmarketcap website. Current rank 948! However, based on their current price they should be on the 1st page. Once coinmarketcap website updates to show the correct supply of Tokens, it will end up on the 1st page, and this will provide further upwards pressure on the price.
How do they share the trading fee on their coins?
Everyday they drop tokens into your exchange wallets for the all the tokens in their exchange.
This is an interesting approach, but currently you won't see much from this as the volumes are still low.
If they were to become a top 10 exchange, the token drops might get interesting.
While the growth has been explosive, it has not been without issues, just this morning when they were the 1st to allow trading on RPX (Red Pulse), there systems become widely unstable.
Users were experiencing alot of issues from not being able to login, to not be able to create/modify/cancel their orders.
They claim it was flood attack, but it is quite concievable it was also they were just not ready for the volume.
Overall though, I think there chances of becoming a top 10 crypto exchange is definately possible.
I would like to end by giving a list of Pros and Cons.
It will be up to you to do more research to see if this is right for you.
I myself have already bought some KCS.
Pros
-Website is clean and nice charts for traders
-Exchange is one of the fastest I've seen at confirming your balances when you deposit BTC or ETH.
-KCS tokens could potentially bring in some good "dividends," especially as it starts to grow
-Its only been less than 2 months, and they have already achieved considerable success and their name is starting to get out there
-CoinMarketCap will list the coin on the 1st page once they update to show the supply based on the current price.
-Currently they have one of the lowest fees, and usually they seem to provide no fees for a month when a new coin is introduced.
Cons
-While it seems one of the points of KCS tokens is to share the fees it gets from trades with its Token Holders, 50% is quite generous and I would not be suprised if they start lowering that amount as their volumes grow
-Since the BNB tokens are giving back something to the user, a possible "dividend," it might be some concerns with regulatory agencys
-While a clean interface and fast exchange, it clearly could not cope this morning with either the attack or their own miscalculations of the trading activity on that day. I am sure they have learnt a lesson from today.
Conclusion:
I think long term the exchange will do great. I believe they also mention they will do a token burning in the future to further reduce the supply of tokens to 100 Million (similar to BNB).
I think there are a few short term as well as a few long term catalyst to their growth.
I would however be weary to purchase too much right now, as its at a all time high.
In he medium term, I think KCS coud reach about $2 by December, but this is just a feeling. I haven't actually done a numbers analyse on it.
For those who just want to have low fees and fast trading, Kucoin is going to be great.
As for the KCS tokens, its a great model sharing with the community that uses them, but I think you should do more research before investing. My goal here isn't to convince you to buy their Tokens, only to provide my own thoughts.
I'm also going to provide you two links to get to kucoin:
For those who think this has been helpful, it would be awesome if you used my referral link
https://www.kucoin.com/#/?r=E2VPiy
For those who just don't want to use my link, just use the one below
https://www.kucoin.com
All the best
-Cryptoanalytics