KuCoin is a global cryptocurrency exchange and decentralized finance ecosystem. It was launched in 2017 by creators Michael Gan, Eric Don, Top Lan, Kent Li, John Lee, Jack Zhu, and Linda Lin.
The KuCoin project began development in 2013 but launched in 2017. During that time, KuCoin raised the necessary capital with their ICO project and sold the KuCoin Shares (KCS). At the time of development, KuCoin raised nearly USD 20,000,000 in BTC. Currently, the company employs over 300 people worldwide, with headquarters in Seychelles.
The platform offers many services and products, including free cryptocurrency bots and automated trades, a free P2P marketplace, margins, and futures trading. KuCoin also provides a crypto lending service that enables users to earn interest on unused crypto.
KuCoin’s success is, in part, attributed to the referral program they used to finance and launch the project. When building the platform, KuCoin offered early adopters a profit-sharing program which was very generous. The program has since been discontinued; however, the platform continues to provide excellent services as well as competitive prices.
The platform design offers an all-in-one exchange that is secure, user-friendly, and has many high-quality defi products. Their desired customer base is widespread and global, as they offer a multitude of cryptocurrencies and support in multiple different languages. Currently, they offer more than 200 cryptocurrencies and access to approximately 400 markets.
This exchange offers its 6 million-plus users multiple features. KuCoin even allows users to build independent projects on the KuCoin architecture, for example, Pool-X.
Pool-X was developed to increase trading, lending, and mining profits, and market liquidity.
Although the platform touts a user-friendly interface and reportedly excellent customer support, KuCoin’s platform is not a very straightforward operation. The complexity of the platform is the result of there being so many trading and defi features available. As such, depending on the individual user, this can be either a blessing or a curse.
If you are a user that is ready to plunge deeper into the defi space, then KuCoin offers massive potential. But if you are new to trading, or do not plan to put a lot of time into watching and participating in your crypto investments, then the KuCoin platform likely has too much horsepower for you.
KuCoin supports the following countries: UK, US, Canada, Australia, Singapore, India, Japan, and more. The exchange also accepts many strong fiat currencies such as: USD, EUR, CNY, GBP, CAD, and AUD.
The platform is available in 17 languages, including: English, Russian, Dutch, Portuguese, Chinese, German, French, Vietnamese, Spanish, Italian, Turkish, Malay, South Korean, Indonesian, Hindi, and Thai.
As a result of the popularity and success of the exchange, the native KuCoin token, KCS, has high liquidity. Its value on the market has also remained steady over time and improved with the 2020-21 market upswing. As the native token, KCS offers traders several opportunities to earn dividends, as well as discounts on trading fees.
Holding KCS is central to the success and usability of the exchange. You do not have to purchase KCS to buy on the exchange, as they offer multiple cryptocurrency trading pairs. However, those who use the native token receive many benefits and access to unique KuCoin functions that non-holders do not.
The greatest benefit of KCS is that they are KuCoin Shares, which means that all users earn from KuCoins trading fees. Each day KuCoin returns 50% of its trading fee earnings to its shareholders. The more KCS holdings an investor has, the larger fee revenue the investor earns. This model incentivizes users to continue to exchange and build with KuCoin.
And to mitigate KCS inflation, KuCoin currently runs a buy-back and burn program. That means that the exchange buys back a certain amount of KCS that are in circulation and then takes them out of use. Burning is common practice with cryptocurrencies to moderate inflation.
To access your account, KuCoin uses Google 2FA. That means that users need a password and their phone to access their accounts. Two-factor security (2FA) is above industry standard, as many exchanges operate with single-factor security.
Users also need to save a pass-phrase/code to retrieve a locked account. This passcode is needed if they lose their phone or computer. It is also necessary if ever the user needs to reinstall Google Authenticator.
A special note: certain phones must be switched to 24-hour time and restarted after users activate a KuCoin account. To do this simply go to settings on your phone, and change the date and time.
Users can also use the following security measures:
The exchange also has three different verification levels.
The amount of personal information required to use KuCoin varies; it depends entirely on the kind and quantity of trade that users execute. Because of this variety of trades, KuCoin offers and the multiple countries the platform functions in, and they may request identification at any time.
If this occurs, then users may be required to provide: their name, address, telephone number, email address, date of birth, government-issued identification number, a copy of your government-issued identity card, as well as information concerning the user’s digital token account.
KuCloud is a white-label extension. KuCloud is a cryptocurrency trading solution that enables developers to build independent cryptocurrency exchanges as well as trading platforms on the platform. KuCloud is what is known as a “subnet.” A subnet allows other projects to build on the KuCoin architecture to run their independent exchange marketplaces.
It is designed to make it easy for other markets to open within the same ecosystem while operating on their own, but still contributing to the general liquidity of KuCoin’s market. Furthermore, as it is a white-label product, users can build their brand, separate from KuCoin.
Within as little as 72 hours, KuCloud users can create their market, including trading features such as: spot trading, margin trading, staking, fiat gateway, and up to 150x leverage futures trading. In addition, KuCoin’s architecture is highly scalable, so partners can also customize their platform.
Pool-X is a Liquidity Trading Market, which launched in August 2019. Pool-X is a POS (proof-of-stake) mining platform, which allows users to buy and sell staked digital assets. Using Pool-X users can stake and un-stake tokens at any time.
Pool-X is another white-label extension of KuCoin. It was designed to increase liquidity in KuCoin’s exchange ecosystem and allow users to buy and sell staked digital assets. The platform offers services that include: liquidity trading market, node integration, and operational solutions to earn passive income.
Investors earn staking rewards and POL (proof-of-liquidity) credits, which are calculated by Total Output of Staking Mining. Stakers can choose from multiple cryptocurrencies, including: ATOM, TRX, ZRX, IOST, and more.
POL is market-orientated, so its value is determined by its supply and demand. Generally, demand for liquidity is positively correlated to the valuation of the cryptocurrency market. Volatility in the market may encourage users to withdraw the assets to trade.
Higher demand in the market often boosts the price of POL. No amount of POL is pre-reserved by any specific investor, which means that all users have an equal opportunity in the market competition.
A staking platform is where users leverage their tokens by staking them on Pool-X. The staking pool allows multiple stakeholders to combine computational resources to increase their chances of the potential of cryptocurrency mining rewards. For example, nodes (and users) can combine staking power to verify and validate new blocks, which affords stakers a higher probability of earning the block rewards for cryptocurrency mining.
KuCoin is also a lending platform. Margin Trading with KuCoin provided traders access to up to 10x leverage. Users can lend their KSC which earns interest. Interest rates are 0 to 0.2% and the duration of lending varies. The term can be anywhere from 1 to 28 days.
The longer coins have been borrowed, the more interest you can earn from them. This is a lot like having a high-yield savings account. And, lending works a lot like traditional banks that leverage cash holdings as collateral for other investments. The major difference being that investors have total control over their investments and how they are used, and the potential profits are much higher.
Most loans are used for margin trading on KuCoin. In this case, other traders need to borrow your unused crypto as collateral for a future investment. On the platform, lending options are set for 14-28 days. However, reports have stated that your tokens can be returned within a day.
Users can automate their crypto-lending as well. Users simply choose the daily interest rate they are willing to accept. Then, when an order meets your interest limit your crypto is auto-lent to other investors.
As with many crypto investments, it is difficult to predict exact potential earnings due to market volatility. However, this also means that when the market is hot, lenders have great interest-earning potential.
The exchange only allows crypto-to-crypto trades, and users cannot make fiat-to-crypto. KuCoin encourages traders to use Tether’s USDT, which is a stable coin that matches the USD, dollar for token. This is the closest and only way to trade USD for cryptocurrency.
Users can also make peer-to-peer (P2P) trades on KuCoin. P2P exchanges are free, and the exchange allows users to find willing buyers and sellers and set their individual terms.
To fund the P2P marketplace, users can make payments with: PayPal, wire transfers, interact, and strong fiat currencies such as: USD, CAD, GPS
Trading pairs include: BTC, ETH, LTC, USDT, XRP, NEO, EOS, CS, GO.
As mentioned, KuCoin does not allow any fiat-crypto trading pairs. Users need USDT to exchange with other cryptocurrencies. However, users can purchase KCS with fiat currencies.
KuCoin has partnered with Arwen to offer non-custodial trading options. Non-custodial trades are made without delay, so the owner of the cryptocurrency always has ownership of their money, without passing ownership to the exchange during a trade.
Many exchanges require cryptocurrency to be held in custody until the trade is complete. KuCoin has taken a much more hands-off approach and allows the technology and community to work on its own.
KuCoin Futures allow traders to buy futures with cryptocurrency. As with traditional futures, KuCoin Futures are an agreement to buy or sell a particular asset at a predetermined price and a set time in the future.
KuCoin Futures accepts only Bitcoin/ETH as a trading pair. All profits and losses are calculated in Bitcoin/ETH/USDT (Tether). Users can trade up to $10,000 US worth of contracts, so long as they have USD 100 available in their account.
With an Over-The-Counter Trading Desk, traders can execute larger trades with specific prices without causing any fluctuation in the price of that crypto. In addition, users can purchase Tether, BTC directly, as well as other cryptocurrencies using fiat currencies, such as: CAD, IDR, VND, and CNY.
As mentioned, to make OTC trades, ID verification is required according to KuCoin’s sliding scale of KYC compliance.
KuCOin has 3 trading bots, which you can use on their app: Classic Grid Trading Bot, Futures Grid Bot, and DCA Bot. Using the Classic Grid bot helps traders to sell high and buy low, automatically. The platform allows users up to 10 trading bots. Once you have 10 active bots you will need to eliminate an older one to add a new grid.
One of the major advantages of KuCoin is that virtually all kinds of trades are possible. Here is a list and description of some of their more common order types.
Limit Orders are made to buy or sell at a specific quantity and price. The order is then filled at said quantity and price.
Post only is an order that is part of KuCoin’s buy or sell book which can be cancelled if the order times out. That means that the order will be filled if and only if it meets a user’s specified price and quantity requirements. If the Post-Only function is not enabled, then, any executable part of an existing order will be executed and fulfilled as soon as any part of your order requirements is met.
Hidden Orders cannot be seen by other users. Only the trader and KuCoin’s buy or sell book can see the order. This mode hides an investor’s intent to buy or sell a targeted token. Others are still able to see the details of this Hidden Order in “Trade History.”
An Iceberg order is much like a “hidden” order. However, with an Iceberg, users choose how much of the quantity of that order that they want to display in KuCoin’s buy or sell book.
A popular feature of KuCoin is its fee structure. Not only does it one of the lowest fees on the market, but users who hold KCS will receive returns from the exchange fees.
KuCoin uses a fee structure that is based on the quantity of the sale. Therefore, as users trade more, the maker/taker fees decrease. However, the highest commission fee is 0.1%, which is one of the lowest in the industry.
KuCoin charges 0.0004 BTC whenever a user makes a withdrawal of BTC, which is below the industry standard charge. Different cryptocurrencies that are available on this platform have different withdrawal fees.
KuCoin does not charge any deposit fees. Zero.
You can withdraw up to 2 BTC per 24 hours without verification with a 1400 USD limit for buying. Verifying your account raises your withdrawal limit to 100 BTC per 24 hours, and there is a 1400 USDT fiat-to-Crypto trading limit.
KuCoin is a vast and growing crypto ecosystem. KuCoin has links to KuCoin News and KuCoin Community on the main page. While it is always wise to do your own research, this is a helpful place to get to know what projects are on the go. It is also an easy way to jump into the world of KuCoin users.
Currently, the exchange itself is centralized, however, they are reported to be launching an exchange on a decentralized blockchain sometime in the future.
Another way for users to earn KCS is to participate in their Bug Bounty Program for KuCoin 2.0. Users are invited to report vulnerabilities as a part of KuCoin’s effort to continue to improve the platform and its products. Simply submit vulnerability reports to KuCoin. If deemed a valuable report, the user’s account is credited with KCS.
In September of 2020, KuCoin was attacked, and a reported $275 million worth of assets were stolen. Fortunately, the majority of the assets were recovered, around $204 million, on October 7, 2020.
The stolen cryptocurrency included: 1,008 BTC, 14,713 BSV, 26,733 LTC, 9,588,383 XLM, Omni, and EOS-based tether (USDT) valued at $14 million, another $153 million in ether and ERC20s, as well as over 18 million XRP.
KuCoin explained that the hack occurred due to a leak of private keys for KuCoin hot wallets. Hot wallets store cryptocurrency on the exchange so that it can be traded and used. However, hot wallets are not the most secure way to store cryptocurrency, as evidenced by the theft.
Since the hack, Tether has blocked all of the stolen USDT tokens, and the exchange was able to return the equivalent of $64 million. The ability to block digital currencies is useful in the event of theft. However, it is only because Tether is not decentralized that they can block tokens. However, the stolen Bitcoins cannot be blocked and require forensic cryptocurrency tracing to be found -if that is even possible.
Although the company was wholly insured against the attack, the event has understandably affected their reputation and trust in the platform’s overall security. The reason why you have insurance is because these types of threats are real and KuCoin was aptly prepared for the attack and handled the aftermath well.
However, despite this attack, KuCoin continues to use hot storage and does not have cold storage. This is a conscious decision of KuCoin, and perhaps a testament to the exchange’s libertarian values. Nevertheless, hot storage is always much more vulnerable to theft and hacking, as hot storage holds crypto online on the exchange.
The majority of major exchanges use cold storage because it is more secure. Cold storage also means that the exchange is responsible for moving money online and offline. Despite this security issue, there has not been a reported attack since September 2020, and the event has not had a significant impact on onboarding new users.
With a user base of over 6 million, and a stable native token KuCoin is certainly a strong and multifunctional exchange. Users can earn back fees by holding KCS, make margins and futures trades, and even participate in Pool-X, a POS staking platform. In short, there are many ways for investors to put their cryptocurrencies to work on KuCoin.
The only real red flag is KuCoin’s security, as they continue to hold their cryptocurrency in hot storage, on the exchange. However, this fact has not strongly impacted the exchange’s continued overall success and popularity.
Lastly, although there are many tutorials and supports, this is not an exchange for first-timers. New investors who are total green, may want to start with a much more straightforward platform or an exchange that has fiat trading pairs, as it is unlikely that new users will already hold any cryptocurrency.