In my last article, we dive into a bit of the history behind cryptocurrency exchanges and how they have failed cryptocurrency investors and day traders over the years. The article then dives into how Binance is leading us into an era of token-based exchange business models which, as the facts prove, are growing at an unprecedented rate compared with your typical Bittrex-style cryptocurrency exchange. A more ‘trader-friendly’ era of cryptocurrency exchanges are upon us.

Today, we’ll:

explore Kucoin Exchange features;

some of their innovative token features/functions; and

and why you may want to begin researching this based on principles of finance and risk management.

My thoughts are that Binance’s strategically built BNB token is was what really captured the market. The goal of this article is to help beginning traders or existing cryptocurrency traders/investors (or anybody just interested in learning about an innovative concept!) understand why using token-based exchanges can be beneficial to our trading/investing strategy.

Kucoin — The People’s Exchange

What if holding 1 token earned you 76 tokens? Would you hodl it?

Kucoin is a newer cryptocurrency exchange that launched operations toward the end of 2017 with “the target of becoming one of the top 10 worldwide hottest exchange platforms [Source: White Paper].”

Image Source: Kucoin Exchange White Paper

The White Paper goes on to explain how the Kucoin exchange Founders had started researching blockchain technology in 2011 and constructed the technical architecture in 2013. With that ‘reliable and extendable technical architecture in place,’ the Kucoin team was able to more confidently build a product that could scale, providing Kucoin exchange users with an enhanced experience while maintaining course to becoming a Top 10 global cryptocurrency exchange. Add a CEO from Ant Financial of Alibaba Group who is a veteran of financial solutions to the mix and existing cryptocurrency exchanges are poised for disruption.

Just 3-months into their expedition, Kucoin has attained a whopping 300,000+ user registrations — a growth figure we’ll only hear from Binance Exchange who reached over 3,000,000 in 6-months. Binance has also temporarily suspended user registrations in order to upgrade their infrastructure and handle the scaling — should be interesting to see if Kucoin will need to do the same. Anyway, let’s examine their innovative token and how holding the Kucoin Shares (KCS) token can earn you 76 token just for holding, daily.

Kucoin Shares $KCS: One Token To Rule Them All?

Kucoin Shares (KCS) give day traders and crytpocurrency investors another very powerful reason to use the exchange — KCS holders receive 50% of the trader fees collected from the currently 76 cryptocurrencies on the platform and a discount on fees. This is pretty powerful considering Binance became the #1 cryptocurrency exchange within just 5-months with a similar business model, garnering a 24-hour trading volume of $9,297,690,547 and over 3-million users.

Just a week ago, Kucoin’s overall 24-hour exchange volume was $50 million. A week before that it was around $20 million. Today, that metric sits at $166,957,272.

The platform takes just 10% of fees while sharing 40% with users who have referred others and 50% of the fees collected on all trading pairs with KCS tokenholders— let’s look at an example of what an the ETH-BTC trading pair looks like with the daily 50% KCS fee-share, holding 10,000 KCS tokens.

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