KuCoin Launched Its Own Trading Platform
KuCoin Launches KuMEX Derivative Trading Platform Beta
KuMEX is in a public beta version and initially offers an unlimited Bitcoin contract (XBTUSDM), quoted in US dollars with the leverage up to the 20th.
In order to make pricing 'fairer and stricter', KuCoin representatives claimed that KuMEX used a Bitcoin spot index, which provides a volume-weighted average price in US dollars per coin on six exchanges: Coinbase Pro, Bitstamp, Kraken, Gemini, Liquid and Bittrex.
Moreover, the spot index prevents contract liquidation 'because of low liquidity of the trading platform or large price fluctuations on one or two spot exchanges'.
Risk Protection and Insurance Fund Mechanisms on KuMEX
KuMEX also offers risk protection with the help of an insurance fund that is 'completely transparent'. The balance of the insured sum will be disclosed on the platform daily.
This fund ensures that investors, who are forced to close their positions, won't lose money which exceeds their position margin.
If the insurance fund is not enough to cover the losses, KuMEX also has an 'automatic deleverage' system, which will be stricter than the standard mechanisms.
Investment Thresholds and Revenue Sharing for Investors
To encourage new retail investors to contact cryptocurrencies, KuMEX offers a lower investment threshold than some other providers.
The XBTUSDM contract price is $1, which allows traders to make more flexible investments. At the same time, KuMEX offers a negative commission for Makers at a rate of -0.025% with a certain amount of a fixed commission, encouraging users to provide liquidity to the platform by creating a market and receiving some commission as motivation.
Michael Gang, KuCoin CEO, said:
In comparison to the spot market, derivatives are much more risky because of the used leverage, so we're more careful about providing such services. KuMEX is a derivative trading platform, and from the very beginning we positioned it as a genuine and advanced financial product, so that all users could trust the platform and trade it freely without worrying about losses, caused by any form of manipulation.
After full launching of the platform, 50% of KuMEX net proceed will be allocated to the distribution to the KuCoin exchange holders.
The Singapore exchange raised $20 million to finance investments in Serie A from investors, including IDG Capital, Matrix Partners and Neo Global Capital last November.