Is KuCoin Shares (KCS) A Good Investment? In-depth Analysis and Near to Longer-Term Expectations
Is KuCoin Shares (KCS) A Good Investment? In-depth Analysis and Near to Longer-Term Expectations

By CryptoBoomer | Investments | 27 Jan 2020


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KuCoin is one of the famous cryptocurrency exchanges where you can trade Bitcoin against altcoins or simply altcoins against other altcoins. There is a wide range of cryptocurrency selections at KuCoin, and it makes the website much more attractive in the eyes of veteran crypto traders. And then, we have KuCoin Shares, which is the native crypto token of KuCoin.

So, what is the benefit of KuCoin Shares? And is it worth it to invest our money in KuCoin Shares? Let’s find out together!

KuCoin Shares - Summary

Everybody who has been in the crypto trading space for a while would have heard of KuCoin, even those who don’t have any interest in trading with it. Yes, KuCoin is not very popular like Binance or Coinbase, but their marketing effort has been quite decent, actually.

At KuCoin, you can find lower cap altcoins with a good amount of liquidity, such as Tokoin, Fantom, or Energi. According to CoinMarketCap’s liquidity metrics, KuCoin is currently ranked in the 20th position, making it more popular than Liquid.com, Gemini, Upbit, or Gate.io but less popular than the likes of Binance, Bitfinex, BitMax, OKEx, or Huobi.

So, how about KuCoin Shares? As mentioned earlier, KuCoin Shares (KCS) is the native crypto token of KuCoin. Just like what you can expect from the name, KCS is like having a certain type of “shares” of KuCoin itself, even though it is still a crypto token that you can trade freely as long as you don’t come from their restricted list.

KuCoin exchange distributes 50% of the trading fee revenues to the KCS holders in the form of dividends, and they do this daily. For your information, the trading fee is a great source of revenue for most crypto exchanges. So by getting 50% of the trading fee revenues, KCS holders will be able to make more money when the exchange itself gets more popular and when they have more trading activities.

To calculate what is your expected ROI by holding KCS, you can go to KuCoinShares.com. For example, one KCS was worth $1.01 at the time this post was written. If you hold 100,000 KCS at the current KuCoin’s daily trading volume ($60,279,943), you will get 21.5 KCS per day or 7839.3 KCS per year. Sounds attractive, isn’t it? 

But again, all of these are just hypothetical numbers. Everything depends on KuCoin’s trading volume in the future, and the dividends that are being shared may decrease in the future to a minimum of 15% (instead of 50%).

Another use case of KCS is for the repurchase or buyback program. KuCoin promises that it will use 10% of its profits every quarter to buy back KCS tokens on the open market, and then they will burn the bought back tokens. It works similar to Binance and its buyback policy on BNB.

Not just for buyback and for dividends, KCS tokens will also allow KuCoin traders to get reduced trading fees. When you have 1000 KCS tokens in your account balance, you can get a 1% discount on trading fees. When you have 10,000 KCS, you can get a 10% discount. When you have 20,000 KCS, you can get a 20% discount. The maximum number is 30% discount when you hold 50,000 KCS.

Last but not least, KuCoin also promises ongoing and various incentives for holding KCS tokens. For example, when KuCoin lists a new cryptocurrency on its exchange, KCS holders might get airdrops as a form of incentive.

Long story short, KCS is the heart of KuCoin exchange. When the exchange becomes more profitable, the natural demand for KCS will also increase.

Analyzing KuCoin Team

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KuCoin team at Singapore headquarters - image source

Of course, when it comes to crypto investment, one of the most important things to do is to analyze the core team. More often than not, the success of certain crypto token is affected by the actions of the team itself. After all, we invest in a cryptocurrency because we believe in its future, isn’t it? And who can help that future to become a reality if not the core team itself?

So, how about the KuCoin team? Apparently, they don’t have too much information that they provide on their own website. To know each individual of the core team, LinkedIn seems to have better information.

The Chief Executive Officer (CEO) of KuCoin is Michael Gan. Apparently, Michael was the technical expert of Ant Financial of the Alibaba Group, and the Chief Technology Officer (CTO) at Kf5.com. Prior to his time with Kf5, he was the Architect and Full Stack Developer at MikeCRM for two years.

After Michael Gan, we have Eric Tang, the President of KuCoin. Unfortunately, there’s not much information about Eric’s background, besides the fact that he studied at the University of Electronic Science and Technology of China.

And then, we have Johnny Lyu, who acts as the Vice President at KuCoin. Before his time with KuCoin, Johnny was the Partner at Phoenixfin Pte. Ltd. and Advisor at MultiVAC. He also had his own experience as CEO with IMOOLO Jewelry from 2016 to 2017.

Another important figure of KuCoin is Ariel Ho, who acts as the Director of BD. She is in charge of the business department and operation issues. She used to be the Global Product Marketer at Tap4Fun, Business Development Manager at TribePlay, and Project Leader at MOKI Tech. Apparently, Ariel Ho is also the founder and Managing Partner at Token Alliance.

Next, we have Larry He, who is the Managing Director at KuCoin. Larry He used to be the Regional Operations Manager at DiDi, a famous China-based ride-sharing application. Before he joined DiDi, actually Larry worked for Uber Technologies, Inc, as Operations and Logistics Manager.

After Larry He, we have Nemo Lee, the Senior Operations Manager at KuCoin. Just like Eric Tang (the President of KuCoin), Nemo Lee also doesn’t show much of his background on his LinkedIn profile. It looks like he finished his education at JiangXi University of Finance and Economics.

Then, another heavyweight in the team is Chloe Zeng, who is the Head of Marketing at KuCoin. She was the DiDi Premier Growth Manager for 11 months before she joined KuCoin. Before her time with DiDi, she was the Head of City Marketing Team at Uber in Chengdu and Sichuan province. For 11 months, she was also the Product Marketing Manager at Enno.

There are other names in the KuCoin team, but it’s too long to put them all here. The names above can already represent how serious this team is. Some of the names used to work in huge tech companies such as DiDi and Uber.

The company itself (KuCoin) is listed as “Singapore-based” despite the fact that they used to represent themselves as Hong Kong-based. 

Partnerships

To know whether a crypto token worth our investment or not, we also need to check the list of partnerships. KuCoin has established itself in terms of partnerships. One of their most established partnerships was the one with Simplex, where it allowed KuCoin traders to purchase cryptocurrencies directly with a credit card.

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Simplex partnership was an important milestone for KuCoin

And then, KuCoin also partnered with Apex Trader, where Apex would integrate KuCoin exchange to their ecosystem, including KuCoin’s API. 

The next big partnership announcement was Arwen’s integration in April 2019. With this integration, KuCoin traders can protect their cryptocurrencies in on-blockchain escrows, trade instantly using cross-chain atomic swaps, and settle trades directly.

Still in the same month (April 2019), KuCoin also partnered with ADAMANT Messenger, where it would allow ADAMANT users to transfer KCS to anyone in chats. 

And then, in November 2019, KuCoin announced another important partnership. It was with BetProtocol to enable playing games with KCS. Prior to their partnership with BetProtocol, apparently, KCS has been made available in ETHLend, Aave Pay, Play Game, SwirlPay, CoinPayments, PunDiX, and several other apps.

Overall, KCS partnerships have been doing well, and it looks like they might be able to partner with bigger names this year (2020).

Controversies Related To KuCoin

Well, there’s not much negativity around KuCoin Shares (KCS), but it’s important to talk about controversies that are directly linked with KuCoin exchange itself. Because, let’s admit it, KuCoin Shares’ future is linked with KuCoin’s reputation itself. 

In August 2018, someone called Jackson Wong reported that KuCoin’s Hong Kong office is empty, and he advised people not to trade with KuCoin. After this controversy went viral on crypto social media, KuCoin made an official response, and they stated that KuCoin’s public address in Hong Kong had been a simple mailing address. The real office is located in four major countries, China, the Philippines, Singapore, and Thailand. 

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This headline successfully grabbed attention everywhere when it happened

Although it’s quite normal for a crypto company to use some mailing address when they register themselves in Hong Kong, the damage was already done. After they heard of this news, some crypto traders believed it would be better for them to trust other crypto exchanges.

In February 2019, another controversy related to KuCoin came to surface. This time the press reported that KuCoin “blackmailed” some altcoin teams to delist their coins or tokens unless if they pay substantial volume-boosting fees. KuCoin denied the accusation, and they believed such rumor might come from a fake or rogue employee.

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This controversial story certainly didn't help KuCoin's reputation

There doesn’t seem to be another controversy besides the two I mentioned above. That being said, these two controversies were big news when they happened. Considering the success of KCS is directly correlated to the success of KuCoin exchange, it’s important for the KuCoin team to be careful with their future steps.

External Factor And KCS Price

So, we have learned the most important things about KuCoin Shares. Is it enough to make our decision? Unfortunately, not. When it comes to cryptocurrency prices, there’s one big external factor that can decide the fate of the whole industry. That factor is called Bitcoin price action.

Yes, since the beginning of cryptocurrencies, altcoin prices have been affected by Bitcoin trend. When Bitcoin price goes up, altcoin prices go up as well. When Bitcoin price goes down, altcoin prices go down as well. KCS won’t be an exception, unfortunately.

So, how about Bitcoin price this year and in the upcoming few years? The thing is, nobody knows for sure. Many people said that Bitcoin price would go up due to the upcoming mining reward halving event that will take place somewhere in the middle of the year. However, skeptics believe that this year’s halving won’t pump Bitcoin price, and whales will actually dump right after the end of the halving.

Either way, it’s important to pay attention to Bitcoin price action if you decide to invest in KCS or any other altcoin.

Conclusion

KuCoin is a decent crypto exchange, and KuCoin Shares is a good investment in the long-term. The dividends sharing and buyback program features are considered attractive for crypto traders to hold KCS in their KuCoin accounts.

And it looks like their telegram channel is also very active, with more than 70,000 accounts in the group, and sometimes more than 2000 online members at the same time. The official medium page also receives a lot of updates, with seven posts so far in January 2020 alone. However, there doesn’t seem to be much interest, and user comments with their twitter and reddit pages. 

Overall, KuCoin has a good amount of active traders. It is still not as crowded as its competition like Binance or Bitfinex or Huobi, though. That being said, nobody can predict the future. So, let’s see what will happen with KuCoin and KCS. They have a lot of challenges in the crypto space.

 


CryptoBoomer
CryptoBoomer

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