KuCoin Derivatives Trading Platform KuMEX Goes Live

KuCoin, an IDG-backed cryptocurrency exchange, has launched the public beta of its derivatives trading platform KuMEX. KuMEX will firstly open the Bitcoin Perpetual Contract (XBTUSDM) and offer up to 20x leverage. To celebrate the launch, KuMEX will initiate a trading competition, with 10,000 KCS being offered as rewards for users according to their return rate ranking. After the official release of KuMEX, the platform will use 50% of the net revenue from KuMEX for KuCoin Bonus distribution to KCS holders.

Despite the cryptocurrency derivatives market being slightly over half of the crypto-to-crypto and fiat-to-crypto markets, in the traditional finance world, derivatives are a much bigger market compared to equity. According to Visual Capitalist, in August 2018, the total cryptocurrency market capitalization was approximately $250 billion, whereas the total value of global stock markets amounts to $73 trillion. Furthermore, comparing the stock markets to the derivatives worth $544 trillion, we can truly see that cryptocurrency derivatives are just in their early days.

As more and more crypto exchanges begin to enter the derivatives market, KuMEX, which has been independently developed by a dedicated team, officially launched on July 8th. KuMEX will firstly open the Bitcoin Perpetual Contract (XBTUSDM) which is quoted in USD, 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. 

In terms of the risk management mechanism, KuMEX has an Insurance Fund as well as an Auto-Deleveraging (ADL) mechanism. The Insurance Fund is fully transparent and the balance will be disclosed on the platform on a daily basis. This fund ensures that investors who are forced to close their positions will not lose money that exceeds their position margin. When the Insurance Fund is insufficient, many platforms now adopt a Socialised Loss mechanism, and the Auto-Deleveraging (ADL) adopted by KuMEX can effectively avoid the inflexibility over settlement in Socialised Loss mechanism.

Michael Gan, CEO at KuCoin, said: “Compared to the spot market, derivatives are much riskier due to the leverage used, so we are more cautious in providing such services. KuMEX is a derivative trading platform independently developed by our team, and from its inception, we have positioned it as a genuine and advanced financial product, so that all users can trust the platform and trade on it freely, without worrying about the loss caused by any form of manipulation. Following our crypto-to-crypto and P2P OTC platform, KuMEX's launch complements our ecosystem, allowing us to provide a one-stop service to crypto investors.”