KuCoin Token

What is KuCoin Token (KCS)?

The KuCoin token is the native token of the KuCoin cryptocurrency exchange that allows holders to take part in profit-sharing.

KuCoin is a high-ranking global centralized exchange platform (CEX) that serves over 20 million users in 207 countries. Given this reach and user base, KuCoin brands itself as “The People’s Exchange.” It offers products such as spot trading, margin trading, P2P fiat trading, futures trading, staking, and lending.

Beyond its current utility, KCS is the central asset around which the planned Kucoin decentralized trading platform revolves. As KCS is the native token of these decentralized financial services and also serves a governance function, the KuCoin team aims to further boost its value via the “Empowering KCS” program.

With the development of KuChain also in the works, the KuCoin token is viewed as a product rather than simply a cryptocurrency token, and one with considerable community interest to boot.

When Was KuCoin Token Launched?

The KuCoin token was launched in 2017 as an ERC-20 token on the Ethereum network. The ERC-20 token standard allows different projects to issue fungible tokens on the Ethereum blockchain, and countless projects have been able to issue tokens using this standard.

KCS was launched as a utility token to allow users to benefit from the growth of the KuCoin exchange. KCS has multiple use cases, including as a medium of exchange, giving holders trading discounts, and participation in token sales.

The KuCoin ICO lasted from the 13th of August to the 1st of September, 2017. 100 million KCS were issued during this ICO in exchange for Bitcoin, with $20 million worth of BTC raised.

Who are the Founders of KuCoin Token?

KuCoin is a Singapore-based cryptocurrency exchange. It was founded in 2013 by CEO Michael Gan, COO Eric Don, CTO Top Lan, President of Business Operations John Lee, Operations and Maintenance Director Kent Li, Chief Legal Consultant Linda Lin, and Marketing Director Jack Zhu.

The founding of KuCoin goes back to Michael Gan’s early mining of Bitcoin and finding that Mt. Gox, the largest exchange at the time, was difficult to use for beginners. Within a year, Gan and his then boss, Don, had collaborated to begin writing the code that would soon become the KuCoin exchange.

How Does KuCoin Token Work?

The KuCoin token serves as the native token of the KuCoin platform, granting benefits similar to those of other exchange tokens such as BNB and FTT. KuCoin holders can avail themselves of up to 80% in trading fee discounts on the platform.

KCS holders also gain exclusive early access to primary token sales of blockchain projects launched on the KuCoin Spotlight program.

What Makes KuCoin Token Unique?

The KuCoin token is unique because, unlike many other exchange platforms, KCS allows users of the platform to benefit from the exchange’s growth via profit sharing. Specifically, KCS gives holders a “passive income” by giving them half of the daily trading fee revenue.

According to an interview with CEO Michael Gan, this is accomplished by using 50% of all trading fees earned by KuCoin to buy KCS from the market and then redistributing that KCS back to users.

This sharing of trading fee revenue may have been conceptualized as similar to a dividend, as KCS stands for KuCoin Shares. However, holding KCS does not equate to owning equity in the company.

Given KuCoin’s global reach and increasing popularity with retail investors, the estimated APR of this “KCS Bonus” scheme exceeds 30%. To avail themselves of this daily reward, users must hold at least 6 KCS.

How is the KuCoin Token Network Secured?

KuCoin has its own blockchain, called KuChain, or KuCoin Community Chain. Along with the Kratos testnet, this blockchain adds more value to the KuCoin ecosystem and has converted KCS into its native token since April 2021.

KuChain is based on Ethereum but developed using the Cosmos SDK. With various proof-of-stake (PoS) and proof-of-authority (PoA) consensus available thanks to the Cosmos SDK, KuChain uses a proof-of-stake authority (PoSA) consensus mechanism.

PoSA, a hybrid of PoS and PoA, supports a short block time of around three seconds in KuChain’s case. In PoSA, participants can stake a number of KCS and take responsibility for validating transactions. However, the number of validators can be quite limited.

What is the Use of KCS?

In addition to profit sharing and fee discounts, along with governance and security on KuChain, KCS is used as the main payment method within the KuCoin ecosystem.

Decentralized payment service SwirlPay supports KCS, and the KuCoin token can also be used as collateral with Constant to borrow U.S. dollars and Vietnamese dong. KCS payments are also accepted by CoinPayments, a borderless online payment platform.

Travala, the leading blockchain travel booking platform, allows users to pay in KCS, and cryptocurrency payment solution provider Pundi X also has scenarios for KCS. KCS can also be used with several gaming platforms, including PlayGame, Splinterlands, and BetProtocol.

Who Controls KuCoin Token?

KCS is controlled by the KCS Management Foundation. It’s a governing body composed of the core KuCoin team, the KuCoin Community Chain GoDAO Foundation, investment institutions, KCS holder community representatives, and other stakeholders.

The KCS Management Foundation deals with decision-making related to KCS development and investment as well as promoting sustainable development of the KCS ecosystem.

How Much KCS Is In Circulation?

100 million KCS were sold in KuCoin’s 2017 ICO, but 200 million KCS were issued in total. The ICO was, in fact, considered the third phase of the KCS distribution plan.

The first phase saw 35% of the supply, or 70 million KCS, going to the founders of KuCoin. In the second phase, the remaining 30 million KCS were sold to private and angel investors.

However, this 200 million KCS supply is diminishing due to quarterly KCS burns. The KuCoin team purchases KCS on the market every quarter depending on the trading volume and burns it, intending to reduce the KCS supply to 100 million KCS.

How Do You Buy KCS?

The best place to buy KCS is on the KuCoin cryptocurrency exchange.

As a crypto-to-crypto exchange, the most liquid KCS pairs are with top stablecoins like USDT and USDC, as well as major cryptocurrencies like Bitcoin and Ethereum.

Is It Possible to Buy KCS Instantly?

Purchasing any cryptocurrency on an exchange is instantaneous. This is because exchange accounts are custodial, meaning that the exchange holds all of the assets you have deposited or purchased on the platform.

Therefore, when you buy KCS on an exchange like KuCoin, the exchange will then internally make a ledger entry, changing the balance of KCS in your account along with that of the other asset you used.

However, all of those tokens are still technically in the exchange’s possession until and unless you withdraw them.

How Do You Store KCS?

ERC-20 KCS can be stored in any Ethereum-based wallet, which is a major advantage of using the ERC-20 token standard. However, KuCoin tokens can also be stored on the KuCoin exchange itself.

It may, in fact, be advantageous for most users to store KCS on the KuCoin platform. This way, they can avail themselves of the many benefits it offers, such as trading discounts and profit sharing from the bonus program.

KuCoin Token Energy Consumption

KuChain is a proof-of-stake authority (PoSA) blockchain developed by the Cosmos SDK, which means KuChain does not consume a significant amount of energy. This is because staking simply means that tokens are locked away in the protocol, as opposed to mining, where millions of computers run hot trying to secure the chain.

In fact, the only nodes that need to stay online are the validating nodes, and PoSA limits the number of validators present on the network. With so few machines needing to be online to keep KuChain going, its energy footprint is negligible in the grand scheme of things.

Is KCS a Good Investment?

It has to be noted that KCS possesses many of the attributes that are appreciated by cryptocurrency investors.

With a capped supply that is constantly being reduced by token burning, there is a definite case for KCS being a good store of value. Plenty of value is added by the many use cases being put in place for the KCS token, from payments to profit sharing and discounted trading fees.

Furthermore, holding KCS is also incentivized by its governance utility within the KuCoin ecosystem which continues to be developed. More and more utility in this regard is not out of the question, so the potential for KuCoin remains high.

However, many risks cannot be discounted. KuCoin does not subject users trading below a certain threshold to KYC (Know Your Customer) and AML (Anti-Money Laundering) procedures, and this could see the platform run afoul of regulators.

Furthermore, KuCoin has on occasion been known to freeze user accounts, leading to complaints on sites like Reddit, and KuCoin customer service can often be found wanting. Too many of these incidents could see the platform build up a negative reputation and the token may suffer in turn.