KuCoin, the popular IDG-backed cryptocurrency exchange, today announced the public beta launch of its crypto derivatives trading platform, KuMEX.
To celebrate the launch, KuMEX will initiate a trading competition, with 10,000 KCS being offered as rewards for users according to their return rate ranking. After the official release of KuMEX, the platform will use 50% of the net revenue from KuMEX as a bonus distribution to KuCoin token (KCS) holders.
Derivatives Platform Goes Live
KuMEX, was independently developed by a dedicated team, and currently supports three types of order: limit order, market order and stop order.
The Bitcoin Spot Index used by KuMEX is the volume-weighted average US dollar price of Bitcoin in 6 exchanges including Coinbase Pro, Bitstamp, Kraken, Gemini, Liquid and Bittrex.
In terms of the risk management mechanism, KuMEX has instituted an Insurance Fund as well as an Auto-Deleveraging (ADL) mechanism. The Insurance Fund is fully transparent and the balance will be disclosed on the platform on a daily basis. This fund ensures that investors who are forced to close their positions will not lose money that exceeds their position margin. When the Insurance Fund is insufficient, many platforms now adopt a Socialised Loss mechanism, and the Auto-Deleveraging (ADL) adopted by KuMEX can effectively avoid the inflexibility over settlement in Socialised Loss mechanism.
In addition to the more complicated operations and higher risk, another reason for the low penetration rate of derivatives in the crypto world is that major exchanges often set certain investment thresholds. For example, OKex and Huobi’s minimal BTC contract value is 100 USD.
In order to allow more retail investors to become familiar with and participate in derivatives investment, KuMEX has greatly reduced the investment threshold. The XBTUSDM contract value is 1 USD, which enables traders to make a more flexible investment. At the same time, KuMEX offers a negative fee for Makers at a rate of -0.025% with a certain amount of fixed commission, encouraging users to provide liquidity to the platform through making the market and earning some commission as an incentive.
“Compared to the spot market, derivatives are much riskier due to the leverage used, so we are more cautious in providing such services. KuMEX is a derivative trading platform independently developed by our team, and from its inception, we have positioned it as a genuine and advanced financial product, so that all users can trust the platform and trade on it freely, without worrying about the loss caused by any form of manipulation. Following our crypto-to-crypto and P2P OTC platform, KuMEX’s launch complements our ecosystem, allowing us to provide a one-stop service to crypto investors.”
– Michael Gan, CEO at KuCoin
Competition
To celebrate the public beta launch of KuMEX, a trading competition has been initiated. The platform will deposit 1 XBT (that is, 1 BTC) into each user’s account for simulated trading. During the activity, KuMEX will prepare 10,000 KCS as rewards for users according to their return rate ranking.
On KuMEX, KCS will also be the only native token and burning fuel. After the official release of KuMEX, the platform will use 50% of the net revenue from KuMEX for KuCoin Bonus distribution for KCS holders. This move will further enhance the underlying value of KCS. KuCoin recently announced that it will upgrade its KuCoin Bonus Plan in the third quarter of this year, and before its launch, KuCoin will execute the Temporary KCS Buy Back and Burn Plan every week to accelerate the burn process of KCS.
KuCoin XBTUSDM Perpetual Contract
| Multiplier | 1 USD |
| XBT Contract Value | Multiplier / XBTUSDM Price |
| USD Contract Value | 1 USD |
| PnL Calculation | No. of Contracts * Multiplier * (1 / Entry Price – 1 / Exit Price) |