KuCoins BuyBack Program

in #kucoin7 years ago (edited)

Math was done about a week ago, so some of the values are off (volume and price)

Lets get some basic info out of the way; KuCoin takes .1% of all volume traded as their means for profit (I am disregarding their profit gained from withdrawing money as that would be nearly impossible to calculate, but I feel this will become mute as I give KuCoin the benefit of the doubt in nearly every scenario.)
90% is then given to the users
50% distributed amongst those who hold the coin
40% to referrers
10% is then profit
Now 10% of THAT profit is used to buy back the coin
Now let's start with the calculations, here comes the first VERY GENEROUS assumption. Lets say they were trading in volumes equal to that of Binance, in the last 24 hours according to CoinMarketCap that is $2,639,203,533 (https://coinmarketcap.com/exchanges/volume/24-hour/)
KuCoins buys back the coins at every quarter of the year, so lets multiply this by 92 as that will be the first quarter (3 months~92 days)
We are left with 242 billion in TRADE VOLUME for the quarter, so let's get to their profits, to get to .1% which is there starting profits we multiply their trade volume by .001.
So they are profiting $242,806,725 every month right? Well they are only taking 10% OF THAT as 90% is going back to the users.
(NOTE we are making ANOTHER MAJOR ASSUMPTION which SEVERELY BENEFITS KuCoin, we are assuming ALL trades are done NOT using there coin, as if trades had been using their coin the user would pay 80% LESS in fees)
So after all is said and done, using all of these VERY nice assumptions every quarter they should take home $24,280,672. Of course they are only using 10% OF THAT to buy back the coins.
Finally every quarter $2,428,067 is being used to buy back the coins, which seems pretty good, but we still have one last calculation which we will put in their favor. Currently their coin sits at just a shy over 2 dollars, if they started moving 100 fold of their trade volume, obviously their coin price would go up, but let's say for imagine sake that their coin only costs 2 dollars.
That would mean they could buy back 1,214,033 of the 100 million they are planning on every quarter. Meaning after roughly 20 years they could satisfy this.
Obviously this is a best case scenario, giving them the benefit of the doubt in almost every scenario, and still 20 years seems like a long roadmap for this.

25 million every quarter seems very little for an exchange moving as much volume as them, (hypothetically) but binance for example gets an extra 40% as they dont need to pay out to coin holders but do pay out 50% to referrers.

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