A comprehensive fundamental analysis on KuCoin
Here is an explanation of the characteristics behind the KCS or Kucoin Shares token that is within the exchange business model. The holder may essentially earn 100+ cryptocurrencies as the fee-share from the Kucoin Exchange platform.
Today we will do the following:
- Explore the features of the Kucoin Exchange.
- Check out some of their innovative functions and features.
- Find out why you would want to start researching about it based on the principles of finance and risk management.
I think that Binance strategically created the BNB token that captured the market. We want to help beginning traders or existing cryptocurrency investors understand why the use of token-based exchanges may be significant to the investment and trading strategy.
Kucoin — The People’s Exchange
What if holding one token earned you 76 tokens? Would you keep it?
The newer cryptocurrency exchange is Kucoin that launched their operations at the end of 2017 with the target to become one of the top exchange platforms in the world.
The White Paper explains how the Founders of the Kucoin exchanges started to research about the blockchain technology in 2011 and created the technical architecture in 2013. Since the extendable and reliable mechanical structure is in place, the Kucoin team was able to confidently build a product that can scale and provide Kucoin exchange users with the enhanced experience as they maintain the course to become a top global cryptocurrency exchange. According to the CEO of Alibaba Group’s Ant Financial who is a veteran of financial solutions to the mix of cryptocurrency exchanges, it may become poised for disruption.
In just three months in their expedition, the Kucoin was able to get more than 300 thousand user registrations. That is a growth figure that we may only hear from the Binance exchange that reached more than 3 million in just six months. Binance recently suspended user registrations so they can handle scaling and upgrade their infrastructure. It may become interesting to see if Kucoin can do the same. Anyway, let us check out their innovative token and how holding KucoinShares (KCS) token can make you ear 76 tokens for holding it every day.
Kucoin Shares: One Token To Rule Them All?
KCS or Kucoin Shares give cryptocurrency investors and day traders a great reason to use the exchange. KCS holders get 50% of the trader fees that they collect from the platform’s 76 cryptocurrencies as well as a discount on the charges. It can be compelling considering that Binance turned into a number 1 cryptocurrency exchange within five months with the same business model. It garnered the 24-hour trading volume of $9,297,690,547 and more than 3-million users.
In the past week, the overall 24-hour exchange volume of Kucoin was $50 million. Before that week, it was around $20 million. As of the moment, the metric is at $166,957,272.
The platform can take 10% of the fees while they share with 40% of the users who referred other people and 50% of the costs collected from all of the trading pairs with KCS token holders.
If you want to trade or invest on cryptocurrency, you may hear about the concept of portfolio diversification. It means that you can hedge the risk of the overall portfolio and decrease the value by combining the number of uncorrelated assets. Since cryptocurrency may be more correlated with each other compared to stocks, we need to become creative to smooth out the level of risks that we may face in this market. It can make it harder for diversification to save us from losses because a lot of cryptocurrencies that trade against the Bitcoin are volatile.
More on Diversification
When some of the portfolio’s position decrease in value, other positions may increase with the aim to make up for the reduction of the different areas of the collection.
One of the best examples of how diversification can successfully lower the risk of investments in mutual funds. They can make it a safe investment compared to investing in just one position. A mutual fund may appear like this:
- 55% stocks — 25% Apple, 25% Amazon, 25% Google, 25% Walmart
- 5% foreign currency — 33% USD, 33% EURO, 34% GBP
- 30% real estate — 50% multi-family housing, 50% commercial shopping centers
- 10% commodities — 3% Silver, 2% Oil, 5% Gold
Here is just an example of how commodities, foreign currency, and real estate can be less risky investments that can smooth out the volatility of the portfolio’s stock market portion.
There is an extremely high risk of cryptocurrency which is why we see significant decreases and increases in price. Whenever there is a higher risk, you may expect higher returns.