Edit: I have abandoned my COSS investment in favor of a company that has the same fee-split allocation structure but is moving much faster. You can read my article about KuCoin here.

TL;DR: COSS is an exchange where token holders get 50% fee split allocation. If COSS can generate trading volumes of even a mid-level exchange, the token price will increase by many multiples.

COSS (Crypto-One-Stop-Solution) is a crypto exchange and payment gateway. The team is trying to do a lot of things, but I just want to focus on the exchange business of COSS. Token holders of COSS are paid a 50% fee split allocation (weekly) of all fees generated on the exchange. The fees paid to the exchange come from both the buyer and seller paying 0.2% commission on trades*. Therefore token holders are re-allocated 0.2% of the daily trading volume (50% of 0.4% commission (0.2% paid by buyer + 0.2% paid by seller)).

What I like about COSS is that it is first and only exchange to offer a fee split allocation, and that doing so makes the coin easy to value using a traditional financial model.

Here’s a back of the envelope calculation of the fee split allocation at current prices/volumes.

COSS is still very young, (the COSS token only began trading on Sept 20th 2017), and currently is only the 80th most popular exchange by trading volume on coinmarketcap.com. This week COSS has approximately had $4mm of trading volume. If we don’t assume any growth this year, that works out to $208mm trading volume/year. Of that volume the token holders receive $416k (0.2%) among 93mm** token holders, which amounts to $0.004/year. The current value of COSS is $0.20/token, so this works out to a 2% annual fee split allocation***.

Remember this assumes no growth.

Now lets assume that COSS gets to the trading volumes of Binance, another very new exchange, which launched in August and 2 months later already has volumes of approximately $100mm/day. If COSS did the same, that would mean volumes of ~$36.5b volume/year, where $73mm (0.2%) would get distributed to 93mm tokens, which amounts to $0.78/year/token. At the current value of COSS at $0.20 that amounts to a ~400% fee split allocation/year.

Assuming that investors drive up the price of the COSS token until it yields a 10% yearly fee split allocation, that would value the COSS token at $7.80, a 39x return from where it currently trades.