KuCoin (KCS): Rewarding users of exchanges, instead of just profitting off of users

KuCoin is a new exchange that launched in August 2017 and can be found here: https://www.kucoin.com/#/

The KuCoin whitepaper can be found here: https://assets.kucoin.com/kucoin_whitepaper_en.pdf

KuCoin Shares (KCS) is the token that you can buy to use the KuCoin exchange. The token appears to be a security-like instrument in that you can earn KCS by actively using the exchange and recouping a portion of the exchange fees in return for holding the coin. My view is that this is a good experiment to conduct as it may align exchange and user interests in a more equitable manner. However, more research and experimentation on the KuCoin exchange will need to be conducted. In the short brief below, here are my thoughts on the benefits and risks.

Positives:

• If you hold KCS, you will earn 50% of the fees the exchange makes after each 24 hour period (and per the whitepaper you can get paid in other cryptos you hold on the exchange e.g., BTC, ETH, LTC)
• Customer service claims they can support you and your ticket within 10 minutes time (I have not confirmed nor tested this claim)
• The 70 million KCS issued by the founders in the first phase should be subject to a four-year lock-up period until September 2nd, 2021
• The 30 million KCS exchanged by the consultants and angel investors in the second phase should be subject to a two-year lock-up period until September 2nd, 2019
• The KuCoin exchange will look to buy back KCS at around 10% per quarter so that 100 million KCS will only ever be in circulation (currently there is around 200 million KCS)
• KuCoin plans to create a decentralized exchange in the future and KCS will be the fuel to run it
• 2FA authentication when buying, selling, withdrawing, etc. at every step of the way (which for now helps to provide some comfort since you'll have to leave your KCS and other coins on the exchange to receive the dividend payout)

Risks:

• The 70 mil and 30 mil lock-up periods mentioned above say "should be" - further reading of the whitepaper determines that after September 2nd, 2018, these members may be allowed to assign or sell 25% of the largest exchange volume in the past 365 days (I view this similar to a derivative option with a condition limiter being volume and we won't know if this group intends to sell or assign for another year from now)
• It's a centralized exchange and all the risks of hacking go with it (however, per the team's own admission they're working to establish a decentralized exchange and they have 2FA enabled)
• It's unclear how the website is hosted and could be prone to DDOS attacks and service interruption
• The KCS token feels like a security (it's unclear how this will be regulated from a US perspective, although the team and company are based in Hong Kong)

If you plan to try the KuCoin exchange yourself, please consider using my invitation code. Once you've signed up, you will be provided an invitation code you can share with others to start earning KCS.

KuCoin sign-up code: E3xyI0

Donations are always appreciated:
ETH/ERC20: 0xA35168D014b4a4E14bc87F6ae93f0AFfDCb09bab
NAV: NPSYw5vyJCXyYNNmsW7dQP3K3dcgGccrYA
LTC: LgwPGoBUaVbd1pmWxBZeu2aEtAHs1vxfaB
BTC: 12GcBRZTpmK3bwRVWSNk6i8BW6gmhp159q
BTC SegWit: 3AunhXGfU4AoaghpaRT8bgqap6tho7wum9
ZEC: t1R2T1wmymLWYudYasUnKVcE3uPsyVLpp2Y