In May, crypto exchange KuCoin raised $150 million in its pre-Series B funding round, bringing its valuation to $10 billion. The funding was led by Jump Crypto and included other investors such as Circle Ventures, IDG Capital, and Matrix Partners.
Although KuCoin is primarily known for its exchange services – with over 600 coins listed and around US$2 billion recorded in daily trading volume – it is now looking to venture into other areas of blockchain technology. This includes exploring play-to-earn games, NFTs, and decentralized finance (DeFi) protocols.
Here’s a look at how Singapore-founded KuCoin became a “unicorn” and one of the biggest crypto exchanges in the world.
The idea behind KuCoin was first dreamed up in 2013 by two of the company’s co-founders, Michael Gan and Eric Don. At a time when cryptocurrency was just beginning to emerge, the two were among the first to realize its potential.
While exploring the domain, they found it extremely tedious to buy and sell cryptos. Even the largest trading platform at the time, Mt. Gox, was quite difficult to navigate. Determined to solve this problem, Gan and Don set out to code their own crypto exchange.
It will be another four years before the KuCoin exchange sees the light of day. Established in Singapore in 2017, the platform has raised US$27.5 million through its initial coin offering (ICO).
Investors were able to purchase the KuCoin (KCS) cryptocurrency, which was presented with the following incentive: 50% of the revenue generated by KuCoin from trading fees would be split among KCS holders. This continues to be true today.
Within three months, Kucoin had over 300,000 registered users – an almost unprecedented growth rate at the time in the crypto industry.
Given its success, the platform held its first seed round soon after. A total of US$20 million was raised, primarily from IDG Capital and Matrix Partners, who also participated in KuCoin’s latest funding round.
How is KuCoin different from other crypto exchanges?
Dozens of new crypto exchanges have been established over the past two years, but KuCoin has managed to continue growing at a steady rate. In December 2021, the platform reached a user base of 10 million people.
One of the things that sets KuCoin apart is its focus on altcoins. The platform bills itself as the “best altcoin exchange,” offering hundreds of crypto coins not found on other exchanges.
Listing standards vary from platform to platform, but many centralized exchanges only offer established cryptocurrencies with large market caps.
For users looking to speculate on lesser-known coins, this can be a downside. They are forced to transfer their holdings and use a decentralized exchange to buy their favorite altcoins. KuCoin helps solve this problem with its wider range of offerings.
Another aspect that helps KuCoin stand out is its focus on community. Through its social trading feature, the platform allows users to interact with community leaders, influencers, and other investors who have similar trading preferences.
KuCoin CEO Johnny Lyu, who is also the co-founder, believes this is integral to the mass adoption of crypto and something that has often been overlooked.
“Most practitioners in the crypto industry were focused on creating better tools to improve the interaction between humans and protocols,” Lyu said in 2021. Facilitating interactions between humans was not considered as a priority.
“This has led to rising education costs and slow industry uptake, creating barriers to mass adoption.”
Where does KuCoin go from here?
As blockchain technology continues to launch new utilities, KuCoin is branching out from its exchange services. The platform has been researching DeFi, NFT, and the metaverse since 2020, and plans to dig deeper with its latest round of funding.
KuCoin Labs, which was established in 2021, is the company’s research institute dedicated to identifying promising crypto projects and helping them achieve sustainable growth. Armed with a fund of US$50 million, he has worked with notable projects such as Bloktopia, Antimatter and Star Terra.
On the NFT side, KuCoin announced its $100 million “Creator Fund” in April, which will be overseen by its venture capital arm, KuCoin Ventures, and NFT marketplace, Windvane.
The fund is dedicated to incubating early-stage NFT projects that span areas such as art, sports, GameFi, and Asian culture.
“At the current stage of KuCoin’s expansion of Web 3.0 and NFT domains and the deepening of the KuCoin ecosystem, the launch of the $100 million ‘Creator Fund’ will undoubtedly give a strong impetus to our process. development,” says Lyu.
Featured Image Credit: KuCoin / Johnny Lyu
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