KCS is an ERC-20 token running on the Ethereum network and is the native token of KuCoin. KCS is a utility token that allows traders to share the growth benefit of the KuCoin exchange.
A brief history
KuCoin is a crypto asset exchange that describes itself as a hybrid exchange integrating features of both centralized and decentralized exchanges. Launched in 2017 and based in the Seychelles, KuCoin claims to be the “people’s exchange.” The long-term goal of the team is to transition to a fully decentralized exchange model. Currently, the exchange operates through more of a centralized model, attempting to duplicate best practices in traditional asset exchanges including dedicated risk and compliance teams. What makes KuCoin unique is its incentive mechanism KCS Bonus system. Through the system, users who hold more than 6 KCS can earn a daily dividend, which comes from 50% of KuCoin's daily trading fee revenue. The amount of rewards that users can get depends on the number of KCS held and the trading volume of the KuCoin Exchange. Based on the historical data in 2021, the estimated APR of the KCS bonus ranges from 3% to 30%.
KCS in practice
In the KuCoin ecosystem, KCS can be used to pay trading fees on the KuCoin Exchange, allowing users to enjoy discounts of 20%. Holding KCS also allows for participation in token sales on KuCoin Spotlight, as well as LockDrop/BurningDrop on the Pool-X platform. However, the main benefit of KCS is the daily exchange profits that can be earned by staking the token. These payments directly reflect the success of the exchange in terms of transaction and trade volume. The more trading fees the platform collects, the larger the daily rewards pool. For example, if a user holds 10,000 KCS, and the exchange collects 20 BTC in trading fees (0.1% of daily trading volume), you would receive 0.001 BTC converted to KCS per day. The payouts are calculated for every token pair listed on KuCoin and are paid out mainly in KCS, but sometimes in other altcoins, too.