Today we are starting a new review of a cryptocurrency called Kucoin.
In a nutshell, Kucoin is a cryptocurrency exchange where you can buy, sell and trade a variety of cryptocurrencies.
But here is the beauty of the platform – if you buy their own coin – called Kucoin Shares (KCS) and hold them in your wallet, you get paid a daily dividend based on how much income they receive in fees from the exchange.
They actually pay 50% of all fees generated on the platform each day to holders of Kucoin, which is pretty generous.
So it’s actually a great passive income opportunity if they can grow the platform to a comparable level to some of the other major crypto exchanges.
All of the income you receive is paid out in the various coins they list on the platform, depending on how much of that coin was traded on the day.
So you will receive a dividend of a load of different cryptocurrencies – giving you a nice diversified portfolio by default.
Of course if there are some coins you don’t want to hold, you can just trade them on the exchange for something else that you do want to hold.
It’s a great idea and encourages people to both use the platform and hold the Kucoin shares rather than sell them or trade them, which should see their value grow over time.
And as an added bonus, you will get paid out in coins like NEO that pay their own dividend (in the form of GAS), so it’s like getting a double dividend. Pretty sweet!
Plus of course you can reinvest your earnings in buying more Kucoin, thus compounding your returns and turning them exponential.
Kucoin will also be using at least 10% of the net profit to buy-back of KCS every quarter and burn it, thus also potentially adding to price appreciation of the coin. They will continue this until 100 million of KCS is destroyed, representing 50% of the total created of 200 million.
We’ve given the exchange a once-over and think it’s a really nice trading platform with a good user experience – certainly a lot more user-friendly than some of the other exchanges out there.
So overall we really like the potential of Kucoin. But of course the question you really want answered is…how much money can you make from holding Kucoin?
Well we are going to find out exactly how much!
We have deposited $200 into the platform, which we have used to buy Kucoin shares. We will hold the Kucoin shares and record our daily earnings to see how much we make.
We will aim to reinvest all our earnings to buy more Kucoin, to hopefully maximise our returns and really drive things forward.
The amount you earn is based on the daily trading volume, so really it comes down to one question: how many users can they add to the Kucoin exchange?
At the moment the daily trading volume is 616 Bitcoin, or $7.2 million, which is fairly low and will need to grow considerably if they are to start generating really attractive returns for investors. But it is still very early days for them so to have achieved that in a fairly short time is impressive.
There is plenty of room for growth as the cryptocurrency market expands and they bring more users to the platform hopefully.
Anyway, however things turn out for them, our results will be updated here regularly so you can track our progress in holding Kucoin shares.
Disclaimer: we are not financial advisors and the above article should not be taken as financial advice. Please do your own due diligence and research and take professional financial advice before investing. All cryptocurrencies are risky ventures so please only invest money you can afford to lose.