KuCoin’s Futures Platform KuMEX Will Launch Bitcoin Monthly Contracts in a Few Weeks KuCoin Follow Oct 17, 2019 · 2 min read

On October 16, at the Blockchain Life 2019 Forum in Moscow, Russia, KuCoin founder and CEO Michael Gan disclosed that KuCoin’s Futures Platform KuMEX is going to launch the Bitcoin Monthly Contracts product in a few weeks.

KuCoin founder and CEO Michael Gan

Officially launched on July 8, KuMEX, the futures trading platform developed by the KuCoin team, offers the Bitcoin Perpetual Contract (XBTUSDM) which is quoted in USD, denominated in Bitcoin and offers up to 20 times leverage. The platform currently supports three types of orders: limit order, market order and stop order.

Compared with other major derivatives exchanges, KuMEX has made many innovations and improvements in creating a fair trading environment and lowering the threshold for investors. The Bitcoin Spot Index used by KuMEX is the volume-weighted average US dollar price of Bitcoin in six exchanges including Coinbase Pro, Bitstamp, Kraken, Gemini, Liquid and Bittrex. Including the figures from more platforms ensures the index price on KuMEX is fairer, avoiding the user’s contract being liquidated due to the low liquidity of the trading platform or large price fluctuations of one or two spot exchanges.

In terms of the risk management mechanism, KuMEX has an Insurance Fund as well as an Auto-Deleveraging (ADL) mechanism. The Insurance Fund is fully transparent and the balance will be disclosed on the platform on a daily basis. This fund ensures that investors who are forced to close their positions will not lose money that exceeds their position margin. When the Insurance Fund is insufficient, many platforms now adopt a Socialized Loss mechanism, and the Auto-Deleveraging (ADL) adopted by KuMEX can effectively avoid the inflexibility over settlements in a Socialized Loss mechanism.

In addition to the more complicated operations and higher risk, another reason for the low penetration rate of derivatives in the crypto world is that major exchanges often set certain investment thresholds. For example, OKEx and Huobi’s minimal BTC contract value is 100 USD. In order to allow more retail investors to become familiar with and participate in derivatives investment, KuMEX has greatly reduced the investment threshold. The XBTUSDM contract value is 1 USD, which enables traders to make a more flexible investment. At the same time, KuMEX offers a negative fee for Makers at a rate of -0.025% with a certain amount of fixed commission, encouraging users to provide liquidity to the platform through making the market, while earning some commission as an incentive.

In September, KuMEX added support for Russian, in addition to supporting English and simplified Chinese languages on the platform. According to Michael, the platform will support more languages like Vietnamese and Turkish later this year.