Kucoin Fundamental Analysis

Introduction

With Coinbase’s historic IPO happening last week, it felt like the perfect time to begin my fundamental research on its exchange competitors. Binance is an obvious conglomerate that I need to perform an analysis on(to be released later this month) but KuCoin has been an exchange that has been growing on me and the more I learn about it and use it, the more I love it. Note: For transparency sake, I do own a small position of KCS(Kucoin’s own coin) and have only been using KuCoin for a few months now but started using it a lot more actively the past  3 weeks and its this active usage that inspired me to dig deeper and learn more about KuCoin’s long term potential. Let’s jump into it.

What is KuCoin?

Kucoin is a cryptocurrency exchange used to buy and sell a large variety of cryptocurrencies like Bitcoin, Ethereum, Litecoin, XRP etc. It was founded in September 2017 and is based out of Singapore. The exchange has a user base of 6 million(as of 2020) across 200 countries and regions around the world and offers a wide variety of products and services ranging from margin trading, futures trading, Spot Trading, Staking etc. 

Platform Evaluation:

When evaluating a crypto exchange I’ve narrowed down the 3 main categories that I look at to the following:

Features

Fees

Usability

Features

This is the most comprehensive and best aspect of KuCoin so buckle in as there’s a lot to talk about here. Some standard features that I lightly mentioned above include:  

Spot Trading

Margin Trading

Staking

Crypto Lending

Pools

Futures Trading

These features are great to have but are offered on other big platforms like Binance and so  rather than talk about them, I would like to focus on the unique aspects that Kucoin brings to the table.

KuCoin Bonus: This is one of my favourite features about KuCoin and in my eyes, creates a strong incentive to adopt the platform and its token. KuCoin has the unique feature of redistributing 50% of all daily trading fees to its users. You can partake in this redistribution by holding at least 6 KCS and the funds are distributed on a daily basis. I personally love this, I can’t name an exchange of KuCoin’s size that does this, the vast majority of exchanges inside crypto and outside crypto do their best to hike their fees and earn as much income from your trades as possible. This redistribution that goes back to its user is great and it’s very rewarding to be given free KCS for simply being a part of the ecosystem. It fits really well with KuCoin’s slogan of “The People’s Exchange”. 

Another feature that I love is the Check-in feature. If you’ve played mobile games on your phone you’ll be very much aware of this feature. Kucoin rewards you 50 “Candy” for logging in each day and clicking check in. If you login for 7 consecutive days, the 7th day will be double the Candy. Users can then redeem their Candy for USDT, vouchers to reduce trading fees and VIP memberships. Unfortunately for me, I didn’t realize this feature existed until about a month into using the platform as I never really took the time to explore all the features, therefore I haven’t gained anything from the check in feature as of yet. But small rewards for simply using the platform are always a plus from me, no complaints. 

Leveraged tokens is a feature on Kucoin that I literally discovered yesterday and I’m loving it so far. Without putting up any collateral and therefore no risk of liquidation, you can go long/short Bitcoin and Ethereum with leverage. For every 1% increase/decrease that ETH or BTC experience, the leverage token moves 3%. This is great if you’re really confident that BTC will bounce from a dip and move up 5%, with leveraged tokens you can turn a 5% gain into a 15% gain without the liquidation risk of typical leverage trading. I started experimenting with this feature by shorting BTC and ETH yesterday( due to the taxes FUD that’s causing this market correction) and I’m loving it so far. Of course, with any sort of leverage you need to be on your A game with risk analysis but once again this is a solid feature that KuCoin offers that I haven’t seen on any other platforms. Two thumbs up from me!

The last main feature that I want to talk about is the KuCoin trading bot. This is the coolest aspect of KuCoin and also the one that I’m still trying to figure out how useful it is. As of right now, you have 2 main options: Classic Grid and DCA. 

 

Classic Grid: This is the one I’ve been experimenting with the past few days, essentially you have the ability to set up a bot that looks to create profit from market fluctuations by placing various buy and sell orders. I can’t tell you too much about this bot as I’ve only been experimenting with it for a few days but I plan on using this for the next couple of weeks and months to learn the ins and outs and hopefully develop a strategy to create some passive income that requires minimal effort on my part. I’ll definitely be writing some blog posts on my thoughts and strategies with regards to this bot once I’ve had more time to figure it out.

 

DCA: DCA or better known as Dollar cost averaging is a phenomenal long term investing strategy which I mention in my Top 5 Investing Rule for the Crypto Bull Run which you can read here. Dollar cost averaging involves purchasing x amount of an investment on a scheduled basis thereby taking advantage of the ups and downs of the market and reducing your risk of trying to time the market. I’m a huge fan of this strategy for long term investments and having a bot that automatically does it for you is a great addition to any platform. I’m not currently accumulating any crypto for the long term as I’m riding the hype behind a lot of coins right now and will begin accumulating solid projects in the bear market(outlined in the blog post mentioned above). I’ll be using this bot once I’m ready to begin my long term accumulation of solid projects.

 

KuCoin also has some new bots being introduced to the Platform: Futures Grid, Smart Trade and Margin Grid. As of right now Futures Grid is the only one available to try but to gain access you need to join their telegram and receive a code. I haven’t gained access to it so I won’t be speaking or reviewing this bot. Overall, there is still a lot I need to learn and experiment with  regards to the bots on KuCoin but the simple fact that these are available are a huge plus in my eyes, I’ve always wanted to try out algorithmic trading and this is a nice introduction for noobies like me.

Fees

In my opinion, fees are an important aspect when evaluating an exchange as who wants to pay high fees? Definitely not me. Platforms like Coinbase are simply and aesthetically pleasing but have some of the highest fees in the industry and therefore I never trade on the platform. I don’t mean to compare KuCoin to Binance so often as the platform has many features that Binance doesn’t offer but I will refer to Binance as this is the platform people are most familiar with as well as its my most used platform for reference. For fees, KuCoin has a similar structure to Binance where you have the opportunity to reduce your trading fees given your trading volume and how much KCS you hold. I love this formula as it gives a ton of utility to KCS on top of already receiving passive income from holding KCS. Trading fees on Kucoin are market competitive, 5/5 from me.

Usability

Kucoin’s trading platform resembles that of Binance and BigOne Exchange. Who copied who is not clear to me but either way all 3 platforms seem to have very similar layouts. When first beginning to use these platforms, I found them to be very confusing to use especially compared to simple platforms like Coinbase. Once you get used to them though, they are straight forward and have a ton of features for you to take advantage of. KuCoin’s desktop version has a great TradingView with buy and sell orders and a ton of chart features. Once you get past the initial learning curve of the platform, it’s very user friendly and they have a great customer support system if you need any help.

Miscellaneous

KuCoin has some of the highest token offerings of any platform that I’ve seen, second only to Binance. In addition to this,  the platform has quite a few hidden gems that aren’t offered on other platforms like LYXe( FA is here), SRK, TRAC etc. Highly recommend looking into the small cap hidden gems offered on KuCoin as they are not only solid projects but also a listing on Binance can send these flying in the short term. It doesn’t hurt to spread out your portfolio to other platforms as you give yourself more opportunity to accumulate tokens that you wouldn’t be able to get if you only had one platform.

Conclusion

After a few months of using KuCoin, it has quickly become my second favourite platform to use in the crypto space. It has several features that I love which would put it ahead of Binance but Biannce has simply moved faster than KuCoin in a lot of aspects from its BSC to having the most cryptos while also investing heavily in various crypto projects. KuCoin does have plans to release its own KuChain in response to the Binance Smart chain and I’m very excited for when this does launch. I believe the KuChain entered its test net phase at the beginning of April so I’m hoping we can expect it to launch later this year but I’m not super familiar with the time frame of the launch. Either way, KuCoin is a great platform and one that highly recommend everyone diversify into as it has x1 several features you won’t find elsewhere and there looks to be free money to be gained with holding KCS. I’m super bullish on KCS for this year and many years to come, not financial advice.

8.5/10