- 2019.12.09 [Mon]
The key factors behind the growth of KuCoin into the world’s largest cryptocurrency exchange in just two years
The cryptocurrency exchange “KuCoin” based in Singapore has grown to become the world’s largest exchange with over 5 million registered users in just two years since its establishment in September 2017. It has made every IEO successful so far, and the transaction fee is surprisingly low at 0.1%. We asked Johnny LYU, strategic & investment VP of KuCoin, about the secret of success and future plan.
ーPlease introduce about KuCoin
It’s a cryptocurrency exchange established in August 2017. This is almost the same time as the Chinese government announced its policy on virtual currency “a ban of initial coin offering (ICO), a cryptocurrency-based funding process”. Therefore we gazed the global market from the beginning. Thanks to a jump of cryptocurrency market conditions that occurred at the end of 2017, we got lots of users, the number of users exceeded 3 million in 2018 and there are currently more than 5 million registered users. Users are distributed in over 100 countries and regions, and the distribution rate is the largest in the world.
ーWhich country has more users?
Users are distributed by 1/3 each in the USA, Europe and Asia. In Asia, there are many users in Japan and Korea, followed by Southeast Asia. There was also a time when Japan was among the top 3 users.
The office is located in five countries: Singapore, China, Philippines, Bulgaria and Thailand, and has more than 300 employees. The technology department has more than 100 engineers, the customer service department has about 100 staff, and the remaining employees are managers and operators and so on.
ーLet us know the factors behind KuCoin success in branding after becoming famous as an overseas exchange in just two years.
There are three reasons. First of all, on the service; Because we valued user experience, asset safety and management convenience, we offered 24/7 online customer service that no other exchange was doing. The second factor is security. Since the establishment of the company, customer assets have never been lost. The last point is about project selection. Selecting a project is important to meet the user needs of “I want to make a good investment”. Because KuCoin founding members are mostly engineers, our project selection criteria is strict. The CEO was originally a senior engineer in Alibaba Finance. The president is a senior engineer who has experience in the Shanda Group and high-end education, game and security industries.
Only technology-rich companies will survive in the technology-driven blockchain industry. High technology is always linked to value. Users can get profit as a value by investing in technology-rich projects.
ーWhat exchanges will survive now that many exchanges are crowded?
The important thing in the blockchain industry is to develop excellent source code in-house. We also develop by ourselves the source code of all business programs such as spot, futures, mining pooling, etc. that are performed on KuCoin platform.
In-house development is very difficult and most exchanges cannot do it. Most exchanges create their platforms using white labels (a product or service purchased by a reseller that rebrands the product or service to give an impression created by the new owner). However, when using white labels, it is difficult to enhance security and add functions, so KuCoin does not use white labels at all. At the same time, the source code developed by KuCoin is a top secret and our company’s value, so there are no plans to sell it to other competitors.
ーWhat is the best way to start a new cryptocurrency exchange?
From the end of 2017 to the beginning of 2018, the number of exchanges increased rapidly as the cryptocurrency market surged, after that, the market situation changed dramatically, and many exchanges disappeared. The cryptocurrency market in 2019 is rising moderately, and now, only exchanges with sufficient technology, safety, and reputation survive.
There are many difficulties when setting up an exchange. They have to get new users, good projects and investment funds, and also overcome the security and technology difficulties that arise when operating an exchange. Because it ’s already too late to expand globally from now, it can be said that it is better to conduct business only in some countries and regions.
ーFinally, let us know about the future of KuCoin.
KuCoin focus on further improving its technical capabilities, as a result, many transactions will be made efficiently. Aiming for the global market, we want to actively collaborate with teams with good projects and teams that are good at management. Since user needs differ from country to country, we will also consider localization and try to make local users more satisfied. We would like to increase the lineup of KuCoin, including spot, futures, mining pooling, public chain and education.
Writer/Kaori Shu Editor/Yosca