It wasn’t long ago that I last spoke about KuCoin. It was earlier this month in fact, in the post “💰 Shilling my Bags! 💰”. Well, here I am speaking about KuCoin again!
As my readers should know by now, KuCoin is my favourite exchange – not as big as Binance (which I also love), but just a little more friendly and nicer to use. KuCoin also continues to score extremely well compared to all other exchanges in terms of honesty and trustworthiness. So what has KuCoin been up to this time, that Bit Brain deems it necessary to write about KuCoin yet again?
That’s what KuCoin has been up to.
No, it has nothing to do with serving steaks rare. (Unfortunately)
“Soft Staking” is a new KuCoin development.
Leading the industry (once again), KuCoin. KuCoin has come up with a way for you to stake your coins/tokens; by doing nothing.
That’s right; you do absolutely nothing. All you have to do is hold your crypto on KuCoin exchange, and *Hey Pesto!*, it’s staked!
Soft-staking is a logical continuation of KuCoin development: Since 2017 KuCoin Shares (KCS) holders have been able to receive “dividends” based on the number of KCS they hold on KuCoin Exchange. Dividends are based on trading fees earned from all trading pairs on the platform (there are hundreds of them). At first those dividends were paid in all the different currencies traded, but then KuCoin simplified it and now dividends are all paid in KCS (which works better). So “soft staking” is not really new to KuCoin, but it’s never before been done with currencies other than KCS.
You see, the great thing about Soft Staking as opposed to normal staking is that your funds remain available to you even though they are staked! You can withdraw your tokens any time! To re-stake, you just deposit them again!
The following coins can now be Soft Staked merely by holding them in your wallet on KuCoin Exchange:
- EOS (EOS)
- Tron (TRX)
- Cosmos (ATOM)
- Neblio (NEBL)
- TomoChain (TOMO)
- DeepOnion (ONION)
- NULS (NULS)
- Energi (NRG)
- Internet of Services (IOST)
Of course KCS will also continue to function as it always has. To my knowledge, this system is practically unique. I know that Poloniex recently started allowing Cosmos staking, but I can’t think of any other offhand examples by reputable exchanges. In his blog post “Soft Staking: High-yield and Anytime-withdrawal? Yes, You May.” (link below), Johnny Lyu – KuCoin Co-founder and VP, states that KuCoin ROI will exceed that offered by Poloniex:
…some projects in our Soft Staking Program are able to offer 6% to 12% of the annualized return rate, while Poloniex offers 3% to 10% return rate within a similar package.
Staking ROI varies depending on the coin and on the markets, so one can’t assign a fixed percentage to anticipated ROI. But from the information we have so far; NRG looks most profitable (with annual returns estimated at about 20%) and EOS least profitable (with annual returns of about 0.5%). I expect those figures to vary wildly over time. A table of available figures so far can be found in this post: https://www.kucoin.com/news/en-soft-staking-cash-back-investment-program
While I’m linking to KuCoin posts, here are some others you can use to find out more about KuCoin’s Soft Staking:
Within those links you can find more links to specific staking data about each coin (though they are all pretty much the same). Take note of some details, such as that you might not be able to withdraw all your EOS immediately. There is no detailed public explanation about how the staking system works from a technical point of view – at least not yet. Fortunately for you, you have me to guess the details for you:
I am guessing that KuCoin pool all of the deposits and then stake them as a pool, or as a series of small pools, probably of varying sizes. In addition to that, they probably keep an unstaked, liquid portion of tokens available, I’m guessing about 2% of the total deposits of each coin. To me this would make sense because it means that roughly 98% of the tokens would be staked at any one time. As additional tokens are required, they could be unstaked if required – without having to unstake the entire balance of those staked tokens. A fair amount of tokens would always be available for withdrawals in the form of the 2% reserve. Because tokens like EOS take several days to unstake, I am guessing that this is why they say that it is possible that you could sometimes have to wait a bit to withdraw all your tokens, though I doubt that this would ever even happen to the average user. Such a situation would occur if customers had made an unusually large number of withdrawals recently and had depleted the 2% currency reserve. In essence the stakes act as a cold wallets. Where exchanges normally keep about 98% of their crypto holdings offline in a cold wallet (at least the good ones do), now KuCoin is basically just staking their cold wallets. I repeat: this paragraph is entirely just my educated opinion (which is almost always 100% correct, because I am an ultra-genius).
On the other hand, if you have a large balance of a coins such as TRX that you want staked, then KuCoin is worthy of consideration.
Of course there is a drawback: you’ll be keeping your coins on an exchange. You all know the saying: “Not your private keys, not your crypto”. As much as I trust KuCoin and I don’t see them running off with anybody’s money, exchanges do have “incidents” – much like the Binance hack in May of this year. I honestly do not know what sort of customer protection measures KuCoin has in place to defend against such events (I would be very interested to know! Perhaps I should write to them and ask…), so I can’t really comment on exactly how safe your coins are when they are staked through KuCoin.
Personally I need to go and look at my own coins to decide if this is worth doing or not. I hold EOS, TRX and NEBL, two of which are already kept on an exchange because I only hold relatively small amounts of them. My EOS is in a wallet, but I’m hardly an EOS whale either. Above a certain USD value I take my coins off an exchange and put them in a wallet, all three of my coins are well below that value (thanks in no small part to the terrible altcoin market we are in!) However, my KCS is over my USD limit, and I leave it all on KuCoin – just to earn the KCS rewards. Read into that what you will.
Well done to KuCoin for offering their customers another great service. This has been a fantastic month from KuCoin: Extra token burns, an OTC trading desk, a Derivatives Trading platform (KuMEX) and now Soft Staking! As I have been saying for years: KuCoin Shares is a damn good token to hold, this platform has a lot of growing to do!
I think that this is only the beginning. I foresee many other exchanges following suit – just as they copied KuCoin’s original dividend paying token idea (COSS doesn’t count because their token crashed and burned, I hate that exchange after the huge losses they cost me!). Bear in mind that if you reside in a country where “Liberty” is only a word and had no true meaning, then the tyrants who unilaterally rule your life may have deemed it illegal for you to earn such staking rewards. Fight them, flee them – or continue to suffer beneath them – your choice.
Yours in crypto
“The secret to success: find out where people are going and get there first”
~ Mark Twain
“Crypto does not require institutional investment to succeed; institutions require crypto investments to remain successful”
~ Bit Brain
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