In a period of time where the crypto space is exploding in popularity, who is setting themselves up for long-term success? The day-traders might, and the HODLers probably are, but the real winners here are the exchanges.
A lot of the most popular exchanges were charging 0.25% fees on every trade (GDAX, CEX.io), and this was considered low at the time. Then came Binance, who started charging a ridiculously low 0.1% fees, and on top of that, they created their own coin (BNB), which you can use to cut your fees in half for a fee of only 0.05%! All you have to do is enable a slider on your account, and it will automatically conduct trades using BNB without you even noticing at all. The results were staggering; Binance completely took over the space and today they average around 9 BILLION dollars in 24h volume every single day; the second best exchange only averages about half of this or less. You can check the ranking of exchanges by volume: https://coinmarketcap.com/exchanges/volume/24-hour/
It took Binance about 5 months to get to this point, and it's so incredibly popular that they had to temporarily pause new account creation so they can update their infrastructure.
They even released another news update after this one telling people that they are not responsible for people selling their accounts to others so they can get on Binance since this started happening.
Binance was able to capitalize not only on extremely low trading fees by creating their own coin, but also by having a very clean interface, engaging contests and adding interesting coins to their exchange very quickly. The Binance coin was launched in August 2017 and has already risen to above $15 as of the time of writing.
But here is what's even crazier. There is an exchange that is almost identical to Binance in it's layout and philosophy that is very new and does not have the trading volume that Binance has... YET. It's called KuCoin: https://www.kucoin.com/
What makes KuCoin so great? First off it has extremely low fees at 0.1% (like Binance), but it's also an exchange that shares a mind-blowing 90% trading fees with its users. This is completely unprecedented in this space and it's going to become completely impossible to compete with KuCoin and Binance once people really start to catch on. They share 50% of trading fees with holders of the KuCoinShares coin (KCS) and the remaining 40% of the trading fees by invitation bonus. I will not talk about the invitation bonus very much, but here is a reddit post with a link to a graphic that explains that distribution:
So now for the good stuff. How are 50% of the trading fees shared with the holders of KCS? Every day, the exchange has trading going on with 70+ coins (and rapidly growing, which makes this a great exchange), and every single day at 00:00 UTC+8, just by holding some KCS, you will receive a percentage (or a "dividend") of the trades. So if lots of people are trading BTC, you will get a proportion of that, and the more it's traded the more of that coin you would actually receive. You can see exactly how much of every coin you would receive today by having "x" amount of KCS and the USD equivalent of the sum of all the coins here: https://kucoinshares.com/
You can learn more about how it works from the informational video they made:
Two days ago, 1,000KCS would give you around $1.50 in total value spread between 70 different coins; the next day it went to$1.72 and it is currently $1.84. This number seems very low, but you have to consider the upside here. As user "4theHODDL" on Reddit puts it: The circulating supply is 100M. Calculation is: Your KCS/100,000,000 KCS * 0.002 Trading fees * 50% (later 15%) * daily exchange volume. All depends on the daily volume. The higher the volume the higher the bonus you get. So if the KuCoin exchange volume increases the KCS price will follow.
So how has the KuCoin exchange grown in the last month? It went from about $7Million in 24h trading volume to $169Million. This is just absolutely incredible. We have only seen this kind of explosive growth in Binance so far and everything here indicates that KuCoin is falling in the same patterns.
By owning KCS, therefore, not only are you getting a coin like any other coin (priced at $8.32 at the time of writing. Track it here: https://coinmarketcap.com/currencies/kucoin-shares/#markets), but you also receive dividends in 70+ other coins that will just keep increasing in value. The value is not only in the actual monetary value, but the fact that your portfolio will go ahead and diversify itself. I will probably make a post on diversification and the incredible power behind that (combined with the classic HODL strategy), but you can do your own research on this.
This is an all around win-win! You can make an account here: https://www.kucoin.com/#/?r=1h324
Thanks for reading and let me know if you have any questions!
(Not a financial advisor, do what you want with your own research at your own risk)