There are no doubt quite a lot of crypto futures exchanges on the market. One of the latest is KuCoin Futures.
KuCoin Futures is the futures exchange that is owned and operated by the KuCoin cryptocurrency exchange. It offers leveraged trading of Bitcoin futures of up to 100x. This is one of the many products and services offered by KuCoin Futures.
But with so many options, is it really worth your while?
In this KuCoin Futures review, I will attempt to answer that. I will give you what you need to know about their platform as well as some top trading tips.
KuCoin Futures Overview
“KuCoin Futures” is short for the Kucoin Mercantile exchange and it was launched in the middle of 2019. It is a Bitcoin futures exchange that offers standard and perpetual futures instruments.
This means that traders can take leveraged positions on the price of Bitcoin of up to 100x their initial position. It is attempting to disrupt the current landscape with the likes of ByBit, BitMEX et al.
For those that do not know, KuCoin is a large cryptocurrency exchange that is based in Singapore. However, since that time they have expanded greatly into a number of different regions and product lines.
KuCoin Futures has been growing its trading volume since inception and has also just launched a more simplified trading platform called their KuCoin Futures “lite” (covered below).
KuCoin Futures is open to a whole host of traders around the world and the platform/website has been translated into over 13 different languages. Having said that, there are some countries that are restricted so you are encouraged to read the restricted access list.
Is KuCoin Futures Safe?
This is perhaps one of the most important questions that you can ask when deciding on whether to use a new exchange. These risks are not just from the outside but also from leveraged trading.
Thankfully, given that KuCoin Futures is operated by KuCoin, it employs many of the same security protocols on both the exchange and the user side.
Let’s take a look at some of these.
KuCoin Futures uses the same hot & cold coin storage procedure that is being used at KuCoin. Essentially, they keep over 95% of their coins in a cold storage environment that is disconnected from the internet.
This means that there is no way that any hackers can get access to the private keys storing the bulk of the exchange assets. This would prevent any situation of insolvency because of a breach.
The KuCoin Futures Coin Storage Protocol
For those coins that are kept “hot” on their servers, they have a multisignature key signing procedure. This means that more than one individual at KuCoin Futures will have to authorize the withdrawals.
Something that is unique to KuCoin Futures and not necessarily to KuCoin is their trading engine. Highly effective trading engines are essential for an exchange that has to process thousands of transactions per second.
The KuCoin Futures engine is able to process up to 1 million transactions every minute and is able to match orders with less than 1 millisecond delay. There is also a multileveled disaster tolerant infrastructure.
What does this mean?
Well, downtime is limited to zero. This is essential for a high leverage exchange that operates in a market open 24/7/365. Moreover, for those traders who use BitMEX you will no doubt be aware of their regular “overcharge” where they go down for maintenance.
For those who have used other futures exchanges, you will be aware of the notion of an insurance fund. This is basically a reserve fund that KuCoin Futures runs which will cover any losses and prevent “socialized losses”.
Current Balance at the Insurance Fund
This insurance fund is replenished during trader liquidations. Essentially, if the liquidation price of a trade is above the bankruptcy price, the difference between the two will be sent to the insurance fund.
If ever there is a situation in which liquidation does not take place above the bankruptcy price then those losses are covered by the insurance fund and do not have to be shared among the other traders.
Sometimes security also starts with the user. This is because we are often the weakest link when it comes to phishing scams and other personal hacks.
Thankfully KuCoin Futures employs the same anti-phishing procedures as are used on the main Kucoin exchange. Perhaps your best bet in order to secure your account is through the use of two-factor authentication with your phone.
There are two ways in which to set up 2FA at KuCoin Futures. You can either use SMS verification or through the Google Authenticator. We would suggest the latter as it prevents the risk of sim swap attacks.
Setting up Google Authenticator
Once you have set up your Google Authenticator app and linked it up to your account then it will generate a secure pin every time that you want to log in. The benefit of this is even if a hacker has your password they can’t log into your account.
KuCoin Futures Leverage
When you are trading at KuCoin Futures you are trading with margin. This means that you are only putting down a small amount of capital to cover the position.
The benefit of this is that you can leverage your position. In the case of KuCoin Futures this leverage can go all the way up to 100x. This means that for a $1 move in the price of Bitcoin, your position will move by $100.
At KuCoin Futures this is done through the use of Futures instruments. These are basically derivative instruments that are an agreement to buy or sell Bitcoin at some time in the future.
KuCoin Futures has two types of futures instruments. They have the traditional type that has a fixed expiry and then they have the perpetual futures that have a rolling expiry time. These are the same instruments available at most other futures exchanges.
Something else that we found quite interesting about the futures instruments at KuCoin Future is that the Futures are “mini” Futures. This means that the underlying for the Futures is not 1 Bitcoin but 1 USD.
KuCoin Futures Perpetual Futures Overview
When it comes to their regular futures instruments, these are quarterly expiries. At the time of this review, there were two Futures. One that expired at the end of the first quarter and the other that was the end of the second quarter.
Another really important thing to note is the spot price that these futures instruments are referencing. This is the Bitcoin spot index and it is a volume-weighted average US dollar price of Bitcoin on 6 exchanges including Coinbase Pro, Bitstamp, Kraken, Gemini, Liquid and Bittrex
Unfortunately, KuCoin Futures currently only has the option to trade Bitcoin futures. One would hope that as they begin to expand out their service there will be more opportunity for additional assets.
KuCoin Futures Fees
Fees are another really important aspect of the trader. The fees that they are charged will directly impact the profitability over the long term.
Hence, we decided to dive into the fees on the KuCoin Futures exchange. Some of these are fees that are charged at the exchange whereas others are systematic.
When it comes to trading fees at KuCoin Futures, they operate a standard maker-taker fee model. With this model, you have two different fee rates depending on whether you are making liquidity or taking it off the books.
At KuCoin Futures, if you provide liquidity to the books then you are a maker and you will get a rebate on your trade. This is set at 0.020%. However, if you take liquidity then you are a taker and will be charged 0.060%.
Trading Fee Structure
If we were to compare this to other trading platforms, the maker rebate is the same as ByBit and BitMEX but you have a lower taker fee. This therefore means that all else equal your trading fees are reduced at KuCoin Futures.
These are not fees that you will have to pay to KuCoin Futures but are fees that adjust for the relative funding rates. They reflect the interest rate differential between the Bitcoin funding rate and the USD funding rate.
This could either be positive or negative depending on whether you are long or short and the relative rates of funding at the time. These fees are paid to the market in order to keep your position open.
At KuCoin Futures, funding occurs every 8 hours at 04:00 UTC, 12:00 UTC and 20:00 UTC. You will only have to pay funding or receive funding if you hold an open position at the time of the funding.
Deposits / Withdrawals
Thankfully, there are no fees that are charged for payments into KuCoin Futures in crypto. If you are going to be with fiat on KuCoin then you may have some inward fees to consider. You can see more of that here.
When it comes to withdrawals in cryptocurrency from KuCoin Futures, you won’t be charged any fees on the exchange side. However, you will be charged a nominal miner or network fee that will cover the cost.
KuCoin Futures Registration
If you would like to give KuCoin Futures a try then you will have to create an account at KuCoin first. This is usually a really simple process and can be done with either an email or a phone.
Signing up at an Account at KuCoin Futures
Before you can complete the registration you will have to get sent a verification code to the email/phone that you have used. If you have agreed to their T&C’s your account is created.
Now there is one important thing to note about KuCoin Futures & KuCoin is that they require some form of KYC in order to lift all trading limits.
So, if privacy is one of your main concerns then you may want to consider another exchange that does not have these requirements.
Now although they do require KYC at KuCoin, it is really quite an effortless process. This can be done as either an individual or as a business entity.
The first step will require you to give information such as your country, full name, and date of birth as well as the type of identification that you want to use. It can either be a passport, ID card or a driver’s license.
Information Required For KYC
Once this is done you will have to upload a copy of this document to KuCoin. You do not have to worry about any breaches of privacy as all communications with KuCoin Futures are done through an encrypted SSL connection.
Once you have uploaded the documents it is sent to the KYC team at KuCoin. How long it takes depends on how clear your documents are and how busy the exchange is. Sometimes it can be automated and others it may have to be sent for manual review. In either case, the max time required should be no more than 2-3 days.
Deposit / Withdrawal
Once you have got your account up then you are going to want to fund it with cryptocurrency. This can either be done directly through generating a Bitcoin address or by transferring your cryptocurrency in from KuCoin.
This is a distinct advantage over other leveraged trading exchanges as it means that you have the option to indirectly fund your account with fiat. Using one of the deposit methods offered at KuCoin (wire, card, etc.) you can buy Bitcoin with USD and other currencies.
Once you have bought your Bitcoin, you will need to authorize a transfer from your KuCoin account to your KuCoin Futures account. To do this you will head over to your “Assets” tab which will give you a complete breakdown of all your funds / PnL on the platform.
Funding Your KuCoin Futures Account
Here you can either select “deposit” which will generate a bitcoin address for you or you can elect to “transfer”. The latter will allow you to transfer in from KuCoin. All you have to do is to select the amount that you would like to transfer and it is done instantly.
When it comes to withdrawals, this is also pretty straightforward. You could either send the funds back to KuCoin with the same transfer capability or you could withdraw to an external address.
If you are going to be withdrawing to an external address then you will have to first whitelabel said address. This keeps things safe as it means that funds can only be sent to a certain address.
It’s time to dive into the belly of the beast. When trading with leveraged Futures, the efficiency of the platform is of paramount importance to us.
KuCoin Futures actually has two different types of the platform on offer. They have a “Lite” version as well as a more advanced version. This means that they are able to provide a trading interface commensurate with your level of expertise.
This is perhaps the best platform for those who are just starting out. We have also not seen similar offers at other leveraged Bitcoin exchanges. The UI is simplified, clean and intuitive.
At the top you have your simple chart interface which merely gives you the historical price of Bitcoin. To the right of that you have your simple order form. Here, unlike with the advanced platform, you to either go long (Call) or Short (Put).
User Interface of the “Lite” Platform
You also have simplified options when it comes to the leverage you are taking on as well as the size of the order. Finally, to the left of the order form you have a handy ranking chart. This shows you how you are doing compared to some other traders on the platform.
You may also want to note that on the Lite platform you can only trade the perpetual Futures. So if you would like to trade the quarterly then you will have to use the advanced platform.
Finally, for those of you who prefer the light UI, you can switch to the white theme in the top right. This could be beneficial to those traders who prefer to monitor the markets during the day.
The advanced trading platform is similar to most of the others that you have on the market. There are a number of tools and features which you can use to help refine your trading.
The first and most important thing to note about this platform is that you can customize the layout. The panels can be detached and moved around in order to suit your own individual trading style.
Advanced Platform at KuCoin Futures
When it comes to the charts at your disposal, the advanced platform uses Tradingview software. For those traders in the know, this is one of the best charting packages and provides an extensive suite of technical trading indicators and studies.
You also have a handy market depth chart. With this you can see the buy / sell walls on the exchange and how the rest of the market is positioned. This could help augment your technical analysis in the main charts.
At the bottom of the chart you have your order history. This shows not only your most recent orders but also all the past ones. It also gives you a breakdown of your running PnL and margin requirements.
Perhaps one of the best features of the advanced platform is broad order functionality that you have. This is perhaps the best way for a trader to manage their risk and take profit.
There are three main order types on the KuCoin Futures platform:
- Market Order: These are orders that are placed at the market rate and will be executed at the “bid” if it is a sell and the “ask” if it is a buy.
- Limit Order: This is an order that is placed at a particular price and will not be executed until the market were to hit this price. The order will be open for a certain time called the “time in force”. We cover this below.
- Stop: This is an order that will place an order once the price reaches a certain limit. You will set a trigger price which will make the order live. You can then also choose whether you would like to make the order that is placed a market order or a limit order. If you are thinking of placing a stop loss then a market order on a stop is your best bet. Stop orders can also be used to take a profit once a certain level is reached.
As mentioned, when you place a limit order you can also select the time in force. This is the length of time that you would like the order to remain alive. There are two types at KuCoin Futures:
- Good Till Cancel: This order will remain live until you either elect to cancel it or it is finally executed
- Immediate or Cancel: This is the order that you will place if you want it to be filled immediately and at the best price. If there are portions that are left unfilled, they will be canceled. Essentially, this order allows for partial order execution
The final order parameter that you have at your disposal is whether you want to make it a hidden order, a post only or a reduction only. Basically, the post only will make sure that you get the maker rate, the hidden is kept off the order books and the reduction only won’t add to your position (only reduce it).
Something else that you may want to make use of before you create a live account is the sandbox. This is similar to the testnet’s and demo accounts that you have at other exchanges and brokers.
This is essentially a test environment that fully replicates the trading conditions on the live exchange. The benefit of this is that you can test out your trading strategies without risking initial capital.
The sandbox is also ideal for those traders who want to test out the KuCoin Futures API (covered below). If you want to try out the sandbox then you will have to head on over to sandbox-futures.kucoin.com and you can register an account there. Unfortunately, you can’t port over a live account.
KuCoin Futures Customer Support
Another really important consideration for any trader these days is customer support. This can be especially frustrating when an exchange is lax and takes days to respond to tickets.
Hence, we decided to test out the KuCoin Futures / KuCoin customer support function. Thankfully, because KuCoin Futures is operated by KuCoin, there is already a pretty large support component that traders can take advantage of.
Perhaps the most effective way to raise an issue with the exchange is through their ticket support system. This makes sure that your ticket is routed to the correct department and can be addressed most appropriately.
Ticket Support System
When we tested with a query about funding our account, we were helped in under 4 hours. This is a pretty effective turnaround compared to some of the other exchanges like Coinbase which have 1 day turnarounds.
If you have a query that is more general in nature then you can always just check out their FAQ section. This is quite comprehensive and will include most of the questions that other traders have raised.
KuCoin Futures API
For those traders that like to develop their own algorithms and bots, you will be happy to know the KuCoin has extended their API functionality to include the KuCoin Futures exchange.
This is a pretty robust API with a number of endpoints as well as SDKs in PHP and Java. You can either build a trading bot to run in the live account or you can develop one for testing purposes in the sandbox.
Generating API Keys at KuCoin Futures
In order to use the API you will first need to generate API keys. There are three types of Keys on the exchange. You have read, write and withdraw. Read allows you to observe the market, write allows you to execute trades and withdraw means you can send funds out.
Once you have your API key generated, you will want to familiarize yourself with the API endpoints and functionality. You can read more about this in the API docs. You may also want to take note of the rate limits to make sure that your bot is operating within it.
If you have used the KuCoin Futures exchange and have been pleasantly surprised with your experience then you can earn some bonuses by referring your friends etc.
KuCoin has a special referral bonus that they have set up specifically for the KuCoin Futures exchange. If someone signs up at KuCoin with your referral link then you will get 0.005% of the total transaction volume of the trader.
This is a different referral structure from exchanges such as BitMEX et al that give you a share of the commission. If we were to calculate the commission that you would earn on one of these exchanges then the KuCoin Futures referral fee is about in line with it.
If this is something that you would like to do then you will need to generate a referral link. This can be done in your KuCoin dashboard by clicking on “referral” in your account profile.
How to Refer People to KuCoin Futures
It is important to note that this referral bonus is paid in KuCoin’s Shares (KCS). This is the proprietary exchange token on the exchange which is similar to Binance’s BNB. KuCoin Futures will calculate this referral bonus and publish the bonus amount each day.
Areas for Improvement
There is a lot that we really like about the new KuCoin Futures exchange. However, we would be remiss if we didn’t take a look at some of the things that we think warrant improvement.
Firstly and perhaps most importantly, they only offer Bitcoin futures. For those traders that would like to trade other assets with leverage, you may want to consider another leveraged trading platform.
The exchange could also do with some more educational guides and resources. Futures trading is by no means an easy task and many traders are still new to the arena. These guides could help smooth these traders over.
Finally, KuCoin Futures is still a new futures exchange which means that it does not have the track record of some more established players. Yes, this is a bit of a chicken and egg scenario as new exchanges have to start out somewhere.
However, if they are able to keep the same level of professionalism as the KuCoin exchange uses then the reputation will follow suit.
In summary then, we really do like the KuCoin Futures exchange. It appears to be relatively safe. Not only does it have the backing of the KuCoin main exchange but it appears to have some pretty effective risk management features like an insurance fund etc.
You also have that greatly simplified “lite” platform that is well suited to those new to leveraged futures trading. Of course, they have the advanced trading platform that has just the same amount of functionality you can expect on any competing exchange.
We also like the fact that their taker fees are less than the competition. Moreover, you have a robust API with a great deal of functionality and trading parameters. Finally, the customer support was above par and has to be commended.
Of course, there were some things that warranted improvement but this is still a new exchange. Hopefully as they grow over time they will introduce new assets and trading technology.
So, should you use KuCoin Futures?
Well, if you are looking for a functional and secure leverage trading platform backed by a well-known exchange then it is definitely worth considering.