How Kucoin Shares (KCS) work, and how to buy them
Kucoin Shares (KCS) is a cryptocurrency token specifically for use on the Kucoin exchange.
Owning KCS does two things:
- Gets you a discount on trading fees. You get 1% off your trading fees for every 1,000 KCS you hold, up to a maximum of 30%.
- Pays you dividends. 50% of all trading fees paid by Kucoin users each day is set aside for KCS holders and distributed equally among all KCS tokens.
A small handful of KCS tokens might not make much of a difference, but the benefits of having more are might be huge. At a price of over US$17 in January 2018, it would potentially be a considerable holding.
How to buy KCS
KCS is only available at Kucoin.
You can buy and sell KCS with the following cryptocurrency. The exact price will vary depending on the pair you’re trading. It’s worth taking this into account if you’re looking to buy or sell a lot of KCS.
- Bitcoin (BTC)
- Ethereum (ETH)
- NEO and GAS (NEO and GAS)
- Tethers (USDT)
- Bitcoin Cash (BCH)
- Red Pulse (RPX)
- Dash (DASH)
- Change (CAG)
- Modum (MOD)
Pros and cons of KCS
As a coin, KCS itself has grown dramatically in value since creation, becoming quite successful in its own right. There’s a set supply limit of about 181 million coins, of which half are currently in circulation.
An example of KCS trading discount and payout
If there are 100 million coins in circulation, and someone owns 1 million of them, then they would get a 30% discount on their trading fees (the maximum possible) as well as 0.5% of all trading fees collected on the exchange.
If Kucoin collects a total of 10 BTC in bitcoin trading fees that day, this person’s dividends would be 0.05 BTC.
Another 49.5% of all the trading fees would be distributed among other KCS owners.
These dividends would be paid in the coins being traded, so this person would quickly build up a considerable and diverse portfolio.
The exact distribution of coins being paid out would vary depending on what’s popular each day, so the dividends would also tend to be paid in the most popular coins. The trading fees can also vary between coins. If there are no fees being paid, for example if there’s a promotion going on, then there would be no dividends earned on that coin for the duration.
As long as Kucoin remains popular, KCS is likely to keep being popular as well. It’s considered to be an effective store of value on the exchange itself and might remain fairly steady even if a particular coin dumps. Even if KCS gets pricey, it's likely that there’s always going to be someone looking to hit the next 1,000 threshold for a larger discount.
The discount on trading fees would be negligible without a massive holding in KCS. At current prices, you’d need roughly half a million dollars' worth to get the full 30% discount on trading fees.
But if you’re working with enormous volumes, then you have to calculate whether it's worth it.
The dividends might be even more valuable. There is the opportunity of a fee discount on a large KCS holding, and you might well earn more back on dividends than you spend in fees.
Dividends take the form of a constant stream of a very wide range of crypto being added to an account. It's worth considering whether, with a bit of time and the possibility that other coins might fail, KCS could become a lot more valuable.