Hello Steemit.
Zero fees on transactions. Did that catch your attention? It definitely caught mine. Recently I posted an article covering my opinions on the differences on KuCoin Shares and the Binance Coin, which can be found here and since have realised that exchange take up a larger amount of my portfolio than I had initally anticpated it would. Including my stakes in Cobinhood and ETHOS, my exchange native tokens now make up ~22.4% of my entire portfolio. Is this negative? If the growth of KCS and BNB are anything to go by, not at all. At the time of my purchase, Cobinhood stood at just below the $0.48 mark and has only celebrated it's first month of being an open exchange this week. I'm very happy with my purchases of this high utility based tokens and expect not only to see gains in my fiat value, but have managed to get more of what I believe to be a highly undervalued coin. So why do I think Cobinhood is so great and why would I claim that it is undervalued?
In my opinion Cobinhood will be the next big boy on the exchange scene. It's face value marketing value is obvious: zero transaction fees on every trade. Before I moved to Binance, my first exchange, I was stuck using the GDAX platform. The advantage of this was that I was able to practice trading without the need for losing any of my account balance due to a lack of transaction fees. Again, my timing was good in my entry to crypto, a move made via Litecoin, as I caught it just before it's rise. I then transferred my amount to BTC and thought "great, I'm in". There was no need for me to figure out whether or not I would lose money on fees and I knew I could instantly trade back if I thought I'd made a bad call (ps. I didn't). For a first time trader of cryptocurrency this was fantastic, the stress of the market did not come into play, I was able to learn the basic psychological movements of the market in a (as much as it can be in crypto) safe environment with no fear of making major mistakes. The downside of GDAX is that up until recently with the addition of Bitcoin Cash there were only three currencies to do this with and even then the options are limited. Why there is no ETH/LTC pairing still I do not know. Cobinhood build upon this idea by offering more coins to take this same approach with and good coins too, coins that the community want to see, coins that people will look at and say "I'm in".
So how do they run a business if there's no exchange fees? Simply put there are other ways of making money than transaction fees. Firstly there are the withdrawal fees which for the most part are relatively comparable to any other exchange it would want to compete with. Their other method of making money is again only beneficial to you as a user. Cobinhood intents on integrating a means of using margin trading using their native COB as the stake. But it is you who will stake your cob with the opportunity to earn interest on your stake. Of this interest, Cobinhood will take a small percentage of this figure as their own. As this, outside of withdrawal fees, is there only real means of income I expect to see this utility as a high priority to them as outlined in their plans.
Another key feature for the platform and another stream of income for them is their underwriting program which is essentially allowing new tokens to be distributed on their platform with their supervision. In exchange they charge the said project a rumoured 15% of their tokens. This comes with the risk projects the community didn't want to see on the market on the market, but is this a bad thing? No because you're under no obligation to purchase these projects. That being said, if you did want to invest in a project that made it on to Cobinhood via the underwriting scheme, your COB tokens earn you the right to a discounted rate of said coin, so holding COB could be a great long term strategy if you wanted to fork into a project released that you like. This is essentially their answer to Binance's Launchpad programme.
So if that is their answer to Binance, what is their answer to KuCoin? One major upside of KuCoin is it's coin voting system and it's rate of adding new coins to the maket. Cobinhood is trying very hard to compete with this as best they can with two votes running at all times, with both an express voting and an express voting deluxe programme. In the case of KuCoin, voting participation is limited to holders of KCS and each vote, although unlimited in amount, is priced as 0.01 KCS per vote. This is refunded to the voters of the resulting winner but to them only, the rest consumed by KuCoin. This limits supply, which is great, but it does hurt when bot voting occurs (I'm looking at you eBTC) and you had voted for a genuine project. In the case of Cobinhood, voting is still limited to COB holders and indeed only those with a stake of at least 30 but there is no output of your assets in exchange for your vote, though it is a singular vote. Long term I see this to be a good strategy as in line with the growth of the platform and this great voting system's appeal the value of owning 30 or more COB will only increase. The frequency of the voting period and the current size of Cobinhood has led to listings on the voting of not only well established coins, but also coins that I was not aware of before but now am which has been great for adding to my continually growing watchlist of coins. I intend to start a series of coins I am watching but not currently invested in and I see coins that have appeared on Cobinhood's voting scheme featuring in that series.
All seems good on paper, good enough for me to have invested in the project and I expect great things from the platfrom which itself is sleek and although I have not yet mentioned it, for $USD users level three verification grants you the opportunity to make fiat withdrawals which although not huge yet, will be. I highly recommend an investment in Cobinhood, especially new users looking for a chance to learn charting and fluctuation analysis of the market in general. I would consider this post an extension of my KSC vs BNB article, so again that can be found here.
Crypto: Stealing from the rich and giving to the poor future rich.
HJB. CryptoKnight.
Follow me on twitter:
twitter.com/HJBcrypto
Youtube/Dtube:
Coming Soon
