KuCoin Shares is an Ethereum based ERC-20 token. It was created by the cryptocurrency exchange KuCoin, one of the largest cryptocurrency exchanges in the world, to be used as a utility token in 2017.

As a utility token KCS offers several interesting use cases as we will see. The most popular use case relates to holding the token in exchange for income, but there are other important use cases that will also be explored in this guide. Read on to learn more about KCS and how it is revolutionizing the cryptocurrency space.

What is KuCoin Shares (KCS)?

KuCoin Shares is an Ethereum based ERC-20 token. It was created by the cryptocurrency exchange KuCoin, one of the largest cryptocurrency exchanges in the world, to be used as a utility token in 2017.

KCS Use Case: Passive Income (Daily Dividend)

Passive income is the holy grail of investing for many in the cryptocurrency space. The KuCoin token is held in especially high regard by those looking for passive income on their digital assets. As mentioned, the traditional staking model requires sacrificing liquidity (the ability to sell) and custody (the ability to control your funds). Offering passive yield without these drawbacks is KCS’s primary use case. [excellent way to describe these concepts simply]

Holders of at least six tokens who keep the tokens in their KuCoin wallet receive a generous portion of the revenue generated by traders on the platform. Only requiring six tokens provides a very low barrier to entry for most participants.

At the time of writing, 50% of the trading fee revenue from KuCoin is shared with these KuCoin holders. The income paid to individual holders is in direct proportion to the number of tokens they own. Therefore someone holding twelve KCS tokens will earn twice as much income as someone holding six KCS tokens.

Perhaps the most exciting part is that holders of the coin are also proportionately rewarded as trading volume (and thus trading fee revenue) on the platform increases. Thus, KCS holders directly benefit from the growth of the KuCoin exchange, creating a flywheel effect.

KCS Use Case: Platform Payments and Discounts

The KCS token can also be used for payment of trading fees on the KuCoin exchange and within the broader KuCoin ecosystem. In doing so traders receive a revolving, though generally substantial discount on these trading fees.

The current trading discount on fees paid with KCS sits at a whopping 20% off each trading fee. As you can imagine, this has made KuCoin extremely popular with high-volume traders. Exchange trading fees can be quite exorbitant and a steep 20% discount can make a huge difference in traders’ bottom line. This has led to increased use of the KuCoin exchange, which is currently the fifth-largest cryptocurrency exchange in the world. As more traders are brought to the platform and buy KCS for low fees, the passive income paid to other KCS holders also increases.

Further, KuCoin has plans to launch its own blockchain, called KuChain, in the future. It is expected that KuChain will run in the background of the KuCoin exchange facilitating even cheaper and faster trading. KuCoin has stated that KCS will be used for fees on the KuChain blockchain as well. Therefore, holders of KCS will likely be able to benefit from future KuCoin ecosystem use cases as well.

KCS Use Case: Speculation on the Growth of KuCoin

Finally, KCS can be held to sell at a (hopefully) higher price in the future. Holding the KCS token is a bet on both the continued growth of the KuCoin exchange and on the success of the underlying token economics which make KCS unique.

In terms of growth, KuCoin has a spectacular track record. The exchange is currently the fifth-largest in the industry in terms of trading volume. The three exchanges ahead of it, namely Binance, Coinbase, and Kraken are all industry giants who have been around much longer than KuCoin which was only launched in 2017. As the cryptocurrency scene continues to grow there is no reason to doubt that KuCoin will likely continue to take a larger slice of the pie.

In terms of token economics, KCS is unique. In cryptocurrencies, as in most investments, price is a product of supply and demand. KCS aims to address both sides of the equation through clever means.

On the demand front, KCS entices investors to the platform with trading fee discounts and daily dividends. As KuCoin adoption grows, demand for tokens also increases working as a feedback loop to keep the price going higher.

In regards to supply, KuCoin regularly burns tokens. Burning means the elimination of tokens from the total supply available. This means that the KCS coin is deflationary in that it becomes scarcer over time. This is a popular feature for investors since it means each token holds a larger percentage of the total value of the network.

Regulatory Concerns

As this guide has shown, KuCoin Shares is a utility token that packs a lot of punch in terms of its three well-defined use cases. Each of these use cases interacts creating a flywheel of increasing demand and dropping supply, a very favorable combination for holders of the token.

Of course, KCS is not without its risks. The fact that it provides a dividend to holders has led many to speculate that this will make KCS a prime suspect to be targeted as a security by governing bodies like the SEC. This risk is worth considering before investing in any crypto assets, but is particularly relevant to passive income plays.

If you’re looking to interact with the KuCoin exchange, or just want a solid utility token to hold that provides passive income, KCS may be right for you.