How to Lockup (stake) your KuCoin Shares – Lessons Learnt from Day 1

 

I wrote about the new KuCoin staking plan on Tuesday. This post explained it: “Don’t miss this one!”

True to my word:

I fully intend to lock up my KCS for this period, and I will do so as soon as I can.

I was waiting on KuCoin, ready to lock my KCS as soon as the clock hit 1 August (UTC +8), which was at 16:00 (UTC) on 31 July.

Of course, there were problems…

The problems:

I would be lying if I said I wasn’t surprised. Secretly, I had been expecting some sort of issue, even though I have great faith in the KuCoin team. Blockchain tech is just still all so new; because of this, platforms often forget to take something into account and fail under heavy loads or unusual conditions. This is exactly what happened to KuCoin.

The second that the staking contract opened, it failed. I hopped onto the various social media channels and watched the ensuing chaos for the first few minutes. To their credit, KuCoin were quick to respond. I saw multiple KuCoin admins respond on the telegram channel within minutes.

It turns out that a large block of simultaneous API calls (to lock KCS tokens) had triggered a safety system in KuCoin’s software. From a geek point of view, this is interesting: I have been wondering what safety systems KuCoin has in place – for obvious reasons these are not openly published. I guess we just found one! The safety system shut off the locking contract and had to be reset and disabled for these particular KCS withdrawals. The delay took about 20 minutes to rectify, after which KuCoin announced that they would retry launching the staking procedure 20 minutes later.

KuCoin did a good job of keeping us informed, even replying to my personal thread on Twitter where I and another investor were discussing the issue:

https://twitter.com/KuCoinModerator/status/1156603884401504257

 

 

At 00:40 (UTC +8) the contract was reopened – and it worked.

To make up for the problem, KuCoin made the decision to double the maximum total amount of tokens that could be locked on Day 1. The daily cutoff for locking is 500 000 KCS, with a limit of 10 000 KCS per person. KuCoin raised the total to 1 000 000 KCS for Day 1 – which is about the best that they could do at short notice without unfairly disadvantaging those who had been waiting. TAKE NOTE: the 1 000 000 KCS limit was reached well before the 10 minute mark! In fact it took only 6 minutes and 6 seconds before the limit was reached – despite it having been doubled.

What to do and what to expect:

There were not a lot of explanatory posts about the KCS lockup process before it happened. I know of only two that KuCoin released themselves. Because of this, I had a few unanswered questions at lockup time – things I was unsure of. I decided to write this post to try to help you with any questions that you may have about the process, and to guide you through those bits of it which are not immediately obvious.

Firstly – the address to use for the lockup is exactly what they say in their blog post: LOCKKCS. “LOCKKCS” is what you type into the “Wallet Address” field (as seen in the image below).

Note: If you type this in before the contract is open, you will see an error message “Contain invalid or sensitive information”. Don’t worry, this is normal. Just wait for the contract to activate at 16:00 UTC. If you try to lockup once the contract is already full (500 000 tokens have already been staked for the day) then you will see the same error message.

Trying to transact when the contract is closed will look something like this:

From www.kucoin.com ; modified by Bit Brain

 

 

Once the contract is open, refresh the page and the error message should be gone. Remember that you must lock a minimum of 200 KCS at a time. Also remember that KuCoin has a lot of checks and balances when you withdraw (depending on your account security settings). For me this meant the usual ritual of keying in my KuCoin trading code, my 2FA code and a code which is emailed to me. Don’t forget about all that, it adds at least 30 seconds onto your precious time, so be prepared before the contract goes live: have your apps and webpages open and get ready to type/click fast and accurately. In reality, you probably have at least 5 minutes in which to to this – a time which should grow longer each day.

If you manage to beat the rush and lock successfully, then you will see that you have an “in progress” transaction in the “Withdrawal history” section at the bottom of the page.

Additional Information:

The “Remark” section caught me a little off guard. With less than a minute to go before unlocking, somebody on Telegram asked about using referral codes for the lockup (as was briefly mentioned in a KuCoin blog post). With literally seconds before the lockup went live, an admin replied that you put the referral codes in the remarks field. Having no other referral code at hand, and not knowing whether it was mandatory or not, and with the admin already swamped with questions, I hurriedly put my own code in the field, just to ensure that all fields were complete and that my transaction wouldn’t get automatically declined and miss the lockup.

No, I’m pretty sure that you can’t self-refer and that I won’t score anything extra by doing this! 😂

I honestly do not know for sure if a referral code is mandatory, I highly doubt that it is. If you want to be a nice person, please use my referral code for locking. I will get extra lockup rewards if you do (which I could really use!). You type it into the “Remark” block. My referral code is E39MoQ

After the problems of the first round, APIs will no longer be able to conduct lockups. Aside from causing problems with the contract, according to https://twitter.com/KuCoinUpdates:

To ensure a fair and equitable KCS lockup program for all of our users, KuCoin will prohibit the use of API to withdraw KCS to the LOCKKCS lockup address. This has taken effect immediately and will continue through the end of the lockup period.

It’s a good decision – it’s fair and it was suggested by a large number of users on Telegram when the first lockup stalled.

Be aware that after you have locked your tokens, you will no longer see them in your KuCoin account. Don’t panic, they will be back (automatically) in three months time – with interest! Also, there is no Lockup Dashboard yet, the only indication of your lockup at this stage is your withdrawal history. Similarly, do not panic if you click on the Etherscan link to your lockup transaction and you see something funny. After lockup your withdrawal page should look something like this:

From www.kucoin.com ; modified by Bit Brain

 

 

If you click “view transaction” (as highlighted above) you will see a message such as this one:

From https://etherscan.io

 

 

That is perfectly normal. The LOCKKCS address is not a regular Ethereum address, it is an internal KuCoin construct. The transaction does not go onto the Ethereum blockchain and will not appear there, so Etherscan is supposed to return an error message. This was confirmed by KuCoin technical staff and the Etherscan screenshot above is from my own lockup transaction.

Note that despite the double allowance, only 286 people managed to lock in round one, I therefore consider myself to be extremely lucky! However, if you missed out, then don’t worry! The rate you can get by locking today is only very slightly less, you’ll still score about a 10% ROI within only three months by locking your tokens! The average amount of KCS locked per person yesterday was 3521 – which I consider to be quite a lot (certainly way more than I own!) With amounts like that being deposited, don’t expect the contract to stay open for long for at least the first few days of locking. I tell you again: be ready and waiting on the dot of 16:00 UTC!

Conclusion:

Despite the teething issues, I want to say well done to KuCoin. I think they did a damn good job of handling the API issue in a rapid, fair and responsible manner – about the best they could have done under the circumstances. I don’t blame them for the issue either, it would have been nice if it had been picked up before the time and prevented, but that’s very easy for me to say after the fact, and hindsight is always 20/20. Just as I think Binance handled their hack very well, it’s good to see the intelligent and levelled-headed folk at KuCoin able to do the same under pressure. Such incidents are potential PR disasters if not handled correctly. I don’t see how KuCoin could have handled it any better, their Tweet on my own Twitter wall being a prime example of the lengths they went to to inform and to ease tensions.

Well done (again) KuCoin!

In other news: I have recently heard that KuCoin are busy with a “dust” feature such as Binance has (great idea in the first place – well done Binance!) whereby small balances of other tokens held on KuCoin will be able to get “dusted” into KuCoin Shares. It should be released with their next platform update, I look forward to this!

Also, for those of you amateur videographers out there, KuCoin is running a video creation competition with 50 KCS up for grabs. Check their Twitter feed for the link.

Out of interest: I decided to shift my small Tron holdings from Binance to KuCoin two days ago. I’m pleased to report that the fully automatic staking contract is working and that I have already earned my first daily “soft staking” rewards.

Now if KuCoin could kindly please stop releasing awesome features all the time, then perhaps I could go a week without blogging about them! That would make a nice change! 😜

Yours in crypto
Bit Brain

Featured image from https://twitter.com/KuCoinUpdates

“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

Bit Brain recommends:

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The Best Crypto Exchange just got Even Better! (Again)

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?

Soft Staking

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.

https://blog.kucoin.com/what-is-soft-staking-kucoins-new-staking-program/

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).

From https://blog.kucoin.com/passive-income-with-cryptocurrency-proof-of-stake/

Depending on the sort of returns you will be getting, staking may or may not be a good idea for you. Like all centralised exchanges, KuCoin has withdrawal fees. Most cryptocurrencies also cost money to send from a wallet to an exchange (unlike NEO which is freedamn that coin is good! 😉 ). For these reasons, sending small amounts of tokens to KuCoin just to be able to stake them is probably a bad idea, you would lose more in fees than what you would gain from staking. Similarly, sending coins to KuCoin for a very short staking period is probably not economically feasible.

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.

Conclusion

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
Bit Brain

“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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💰 Shilling my Bags! 💰

 

If you don’t know that, then you obviously don’t read my blog often enough, what’s wrong with you? 🤔

What I WILL do is to give you some amazing suggestions based on coins and tokens which I already hold. I’m about to do just that.

CargoX (CXO)

Ah yes! Still my favourite low market cap coin and still ridiculously cheap, CargoX has some more good news for us. Having already succeeded in launching their “Smart B/L” product, CargoX continued to work on their Blockchain Document Transaction System (BDTS). It’s more than just a big name. In their latest move, they have added a “Smart L/C” to the BDTS platform.

An LC is a “Letter of Credit”, a document which plays a vital role in global logistics systems. This little Wikipedia article explains them nicely: https://en.wikipedia.org/wiki/Letter_of_credit.

According to their monthly email, the Smart L/C has been developed, but still requires testing. Once completely tested and integrated, it and the Smart B/L (Bill of Lading) will enable CargoX to make paper documentation in logistics transactions a thing of the past. While the shipping industry that CargoX targets is still slow to embrace change, I believe that it’s just a matter of time before they realise the cost savings to be had by using this platform. I remain extremely bullish on CXO.

Perhaps, I’m not the only one realising this: Since mid-June, the volume of CXO has risen by approximately 3x. Better still: while it was often traded more on CoinTiger than on KuCoin, that relationship has now been completely reversed. KuCoin trades (specifically the CXO/ETH pair) now far outweigh CoinTiger trades. This means that the KuCoin CXO/ETH pair has actually grown in volume by a factor of about 9! (From around $10000/day to $90000/day.) With KuCoin being one of the most trustworthy exchanges out there (according to the recent “reported vs actual volumes” exchanges study by The TIE) this is very good news for CXO!

From https://www.coingecko.com/en/coins/cargox

 

Which brings us to…

 

KuCoin

My favourite exchange and the home of KuCoin Shares (KCS) is at it again. I can not believe how much good news is coming from this wonderful exchange!

Yesterday KuCoin launched the public beta of KuMEX, it’s new derivatives platform.

“KuMEX will firstly open the Bitcoin Perpetual Contract (XBTUSDM) which is quoted in USD and denominated in Bitcoin and offers up to 20 times leverage. The platform currently supports three types of order: limit order, market order and stop order. After the official release of KuMEX, the platform will use 50% of the net revenue from KuMEX for KCS Bonus distribution for KCS holders.” 

While I am strongly against derivatives trading of crypto, especially with leverage, I realise that not everybody thinks that way. This should be a popular platform that will contribute greatly to the exposure of KuCoin. From the quote above, we can also see that it should have massive benefit for KCS holders.

Of course ever since Binance announced that Binance.com would be shutting down US operations in September, crypto traders have been rushing to find other good exchanges. I immediately noticed the interest grow in Nash Exchange (NEX) and KuCoin. But as of late June, this suddenly really kicked into gear: KuCoin volume has skyrocketed!

From https://www.coingecko.com/en/exchanges/kucoin

 

But wait, I’m not done with KuCoin yet! They also implemented a new weekly temporary KCS token “Buy Back and Burn Plan” which will run for the duration of Q3 2019. I’m afraid that I don’t have much information on why this has been implemented or what is to replace it in Q4, but it will run in addition to the existing quarterly token burns (which you can track here: https://kcs.kucoin.com). This is more great news for KCS holders – people who already get free KCS dividends paid to them daily! KuCoin state that they will use 10% of profits for token burns and that this Temporary Plan will “substantially increase” the amount of KCS that is burnt. How long have I been telling you to buy KCS now?…

Oh, one last thing: they’ve also launched their Over-The-Counter trading desk.

All of that happened within the first 8 days of July, put off buying KCS at your own peril…

NEO

No Bit Brain shill post would be complete without mentioning NEO! As part of my new resolution to keep you more in the loop about NEO happenings, I feel that I should inform you of NEO’s EcoBoost Plan.

Yes, I know that Ford manufactures EcoBoost engines – No, they are not related.

NEO’s EcoBoost plan is a three-phase, $100 million plan designed to:

  • Recruit Partners
  • Recruit Projects
    • In NEO’s words: “further enrich the community, incentivize developers with existing products, and encourage projects to seed even better projects”
  • Accelerate the Launch of Projects

You can read more about it here: https://neo.org/blog/details/4158

My bags are shilled, my job is done. 😃 Now the decision making is up to you.

I own all these coins in relatively large amounts and I won’t be selling them – even if BTC continues to murder altcoins. Read into that what you will.

 

Yours in crypto

Bit Brain

“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

Bit Brain recommends:

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Crypto Shopping Cart – 25 June

 
Here I am – buying yet again.
This isn’t my first buying spree of the month, I wrote about my previous round of buying in “Crypto Shopping Cart – 6 June”. Some things have changed since than, some haven’t .
Last time I went shopping I bought Holo (HOT), Ontology (ONT) and Icon (ICX). I also announced my intention to sell ETC and stock up on more CargoX (CXO). Let’s take a look at what I did this time.
A lot. I have actually been shopping three times since my last Shopping Cart blog post. The fact that I am now averaging a

Are you still foolishly ignoring me?

Perhaps you read this post last month: “Ignore my suggestions – at your own peril” in which I discussed the suddenly popular Enjin coin, a very good crypto which I have since shown you is “Still going strong”.

More to the point, I showed you how often I had recommended Enjin coin BEFORE it ever gained overnight popularity and shot upwards in price.

I know that I’ve recommended a lot of cryptos, but there are a lot of good cryptos out there! I have always tried to explain why I recommend any particular coin. Some of them have yet to move – like CargoX which

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