In this article, I will share with you how you can earn an additional income through a project called Kucoin.
- Purpose: cryptocurrency exchange
- Website: kucoin.com
- Company: a major international cryptocurrency exchange launched in Hong Kong in the autumn of 2017. The exchange offers a large selection of digital currencies for trading. The company has its own cryptocurrency called KuCoin Shares (KCS).
- Current Development Stage: Active, Trading volume of $9 million daily.
At least 10% of the project’s revenues are allocated to the repurchase of tokens to reduce their circulating supply, by analogy with the Binance exchange model. Redemption is made on a quarterly basis. The current price of KCS is roughly $0.59 USD.
Up to 90% of the revenues of the trading platform are distributed among users as follows: up to 40% via the referral program and 50% via dividends for the holders of tokens.
There are three options for using KuCoin tokens:
- Dividends for storing KCS tokens on the wallet.
- Referral program.
- Discount on trading commissions on a platform
Let us touch on each of them them in a more detailed way.
Dividends for Storing
The exchange does not charge a commission for crediting and withdrawing funds. For all trading operations on the platform, a fixed commission of 0.1% of the transaction is charged, and the maximum amount of commissions earned by the exchange from each transaction is 0.2%. Thus, with the current daily trading volume, the amount of exchange commissions is approximately $13,500 if we take a commission of 0.15% as average. When calculating bonuses, we will proceed from this amount.
Bonuses are distributed among tokens holders daily. Their size is calculated based on the number of tokens on the user’s account at 00:00 UTC +8 (at 16:00 London time). Moreover, bonus distribution occurs automatically within 24 hours.
To get the bonus, you need to set up two-factor authentication and have at least 6 KCS on your internal wallet for at least 24 hours.
*For the calculation, the rate of tokens is used at 04.12: 1 KCS = $ 0.59.
- Investment amount: $ 1,000
- Number of KCS tokens: ~1,695
- KuCoin trading volume (24h): $9 million
- Amount of commissions (24h): $13,500
- Calculation formula: commissions * 50% * user’s share in the total number of tokens = $13,500 * 50% * 1,695/180,000,000 = $0.0635
Thus, we get the following indicators of profitability:
- Profit per day: $0.063
- Profit per year: ~$ 23 (~2.3%)
KuCoin presents a three-level referral program, allowing users to receive a portion of the commissions from transactions of invited referrals. These are broken down as follows:
- Level A: 20% (direct attraction of a new client – you invited user A)
- Level B: 12% (attracting a new client by an invited user – user A invited user B)
- Level С: 8% (user В has invited user С)
Payment procedure: referral transaction amount * % commission * referral bonus (from 8 to 20% depending on the level). Bonus payment term: 1 year from the moment of the first transaction made by the referral on the platform.
Discount on Trading Commissions
For every 1,000 KCS tokens in the account, the user is given a discount on the exchange commission charged for trading operations in the amount of 1%. The maximum discount amount is 30%. So, to get the minimum discount, you need to purchase tokens in the amount of $590, and to get the maximum discount in the amount of $17,700 (at the exchange rate of 04/12/18).
KuCoin exchange tokens are of interest from the perspective of passive income since this trading platform is already popular and has prospects for further growth. For token holders, there are two main factors of potential growth:
- A gradual decrease in the number of tokens due to the buyback program
- A Possible increase in the turnover of the exchange.
Keep this in mind if you decide to diversify into Kucoin for passive income purposes.
Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
Featured image courtesy of Shutterstock.