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Johnny Lyu is a co-founder of a known and respected cryptocurrency exchange KuCoin which lately got Best Cryptocurrency Exchange Award on BlockchainLife 2019 event.
- Tell us who you are and what function do you have in KuCoin?
Hello everyone, I am Johnny Lyu, VP and co-founder of KuCoin, head of the strategy and investment department. As for my function, externally, like what I am doing here, is trying to get more crypto followers to better know KuCoin as a global exchange; also, I will be handling potential strategic partnership establishment, so please throw as much resource as possible my way; internally, I lead new project set-up, such as the recent Spotlight – a new-type project launch platform.
- Now before we get into questions targeted mostly about exchange, what’s your background in crypto how or when did it start. And how did you get into running exchange?
Rather than the background in crypto, I’d say the background with our CEO Michael. We are friends for over a decade, together we used to establish a start-up, a website for picture and related skill sharing. I used to be a coder myself.
After we sold the website, me and Michael both decided to go learn in larger internet firms. I went to an e-commerce platform Milanoo, while Michael joined Ant Financial. We both have learned a lot about how to run a team as well as technology.
Michael got interested in crypto earlier than me, roughly in 2013 I believe, when he got the domain registered, but not until July 2017 did he decide to establish an exchange and started coding. As he preferred to focus more on the technology side, he invited me to take care of the operation part, that was when I joined.
- How did KuCoin start, what was the main goal you had in mind doing the exchange? Also. what does the name stand for if anything?
I think I briefly mentioned KuCoin’s birth in the question No.2, let me elaborate it a bit. In mid-2017, Michael and our President Eric sensed the momentum of the crypto world and got more convinced about the bright future of blockchain, they decided to seize the opportunity, very wise move indeed.
However, the path to achievement is usually bumpy. Just a few days after the exchange was launched, the Chinese crypto area suffered from a quite strong headwind, which significantly altered our strategy and leads to the current profile – the people’s exchange globally.
Our goal is to become a leading crypto exchange that serves a wide range of users across the globe, provides strong liquidity and trading functionality safely and efficiently.
As for the name, no need for an explanation of “Coin”, right? “Ku” represents native bank in ancient Chinese, so together the meaning is quite obvious.
- I remember the first unique thing you had is adding NEO as native market and being first to add tokens made on it. What are your plans now, maybe TRX pairs?
Rather than a detailed plan based on a specific chain, what we have been doing is being open and seeking projects with great potential. We saw a lot of good public chain projects competing last year, such boom is substantial, we also contributed by investing and listing.
Exchanges have differentiated style, or some call it preference, in terms of the vertical of listed projects, indeed we have helped quite a few hard-core technology projects to go public. But we surely don’t limit ourselves.
There are others, the advantage of which is less-technical but more of ecosystem cultivation and market development also could be potential leading blockchain projects. But of course, the ideal targets would be the combination of both truly disruptive technology innovation and strong capacity building ecosystem.
It’s not easy for projects to evolve towards this way, neither for us to identify such teams. But we won’t stop searching.
- You GUI looks very similar to Binance, people often wonder are you guys somehow connected ie on the technology or engine level?
For readers don’t know KuCoin well, we build the platform from scratch by an independent research and development team, the original coding was done by our CEO Michael himself. He is hundred percent techie, no doubt.
Binance is for sure one of the leading exchanges in the crypto world, they are doing great, no doubt either.
But if users would try both platforms, especially our V2.0 trading engine launched in mid-February, I believe there are quite a few differentiations to be appreciated, including but not limited in order types (Good till Cancel, Good till Time, Immediate or Cancel, Fill or Kill, Hidden Order), millisecond-level latency performance. Basically, it’s the whole process, from registration to placing orders, to withdrawal, users will have a unique experience.
We learn from each other, also we learn from the traditional financial market, and I believe we are not alone. The whole industry is relatively young, only by keeping learning can we move forward. And this, in general, is for the long-term benefit of the crypto and blockchain world, as well as our self-improvement.
- You mostly add tokens based on smart contract platforms or ones that made ICOs, what about old blockchains that don’t have funding but have their own userbase yet no representation on Asian exchanges? There’s plenty 4-5 years old coins on Bittrex that have ie no Chinese places to trade.
Please do throw such projects our way.
We certainly have our logic in terms of choosing listing targets, but we surely don’t shut our door, so if we are approached by such projects, we’ll be more than happy to speak with them, and will definitely take it very seriously.
As for “Chinese place” to trade, technically, KuCoin is an offshore registered exchange. We hold Estonian crypto exchange license, and the majority of our users are from overseas.
- Spotlight section is a new thing you released where a project is sold exclusively on your platform with your native currency KCS. Tells us more about current and future plans for this spot on your exchange?
You did some research, my friend. Yes, Spotlight is a new-type launch platform, aiming to help more good projects to go public.
We announced our second Spotlight project Trias a few days ago, and there are more to come, so please stay tuned.
Trias is an all-platform-supported (Server, PC, Mobile, IoT, etc) native-application-compatible smart contract execution platform, development framework and collaborating ecosystem. If we somehow separate the crypto arena from the blockchain area, the Trias team has stayed very low key in the former, while has made quite a few achievements in the latter, especially in terms of to-business and to-government technology adaption.
We are very selective since for us to identify great investment targets for our users is as important as supporting great projects to draw more attention and get proper financial aid.
I mean, such project launch approach is quite special. It’s slightly different from listing on the secondary market, though it’s highly related. For Spotlight, we put on primary market investors’ shoes and screen out great projects, the true decent investment targets. Via this, we can help to generate more value for both our users and the projects, this is the core value as an exchange.
- The first IEO sold in seconds, do you plan on somehow allowing people to have more time to do the buyings or for example give cap per users in future so more people can participate?
Yes, in 7 seconds, to be precise. What can I say, it was what it was, a blockbuster.
But yes of course, we’d like to see more users to participate. That’s why we adjusted the rules for Trias, to lottery from first-come-first-serve.
To elaborate the new rule a little bit, basically, registered users will be issued a certain number of lucky draw tickets based on various conditions (trading volume, KuCoin Share bonus, KuCoin Share holdings, etc). Obviously, the more tickets you get, the better the odds to win will be.
- Speaking of KCS initially for holding them you were getting % of all traded coins, later you changed that so only KCS are made from the shares. Yet the old system generated loads of dust which cant be traded or withdrawn. Do you plan adding some function of getting rid of the dust ie by chaning it to KCS?
Sorry, I am kind of confused by the question. But to clarify the KCS bonus mechanism from the very beginning, here is the thing.
The bonus of holding KCS now comes from the whole profits of all trading pairs, it’s just paid off in KCS. And you are right about the dust created previously, that’s the reason we changed from other tokens to KCS in terms of paying the bonus.
As for getting rid of the dust, it surely is on our agenda, however, technology development takes time, while the market turns too fast. So, I personally suggest users to change those tokens to main coins first for their own benefit.
We are talking about Segwit on technical basis, right? If so, we already support Segwit with our V2.0 trading engine. After the mid-February launch, we support transfer-out with Segwit.
- Speaking of Bitcoin, do you have any predictions of price in 2019 and 2020?
I wish I have, I really do. But let me answer your question this way:
In 2012, Bitcoin experienced the first Halving; in 2013, we saw the price of Bitcoin rocketed; in 2014, cryto-ers stepped into autumn; when time came to year 2015, some were feeling desperately cold; and a new round of the seasons re-started in 2016, when Bitcoin’s block rewards halved for the second time.; then we saw the insanely bullish market in year 2017; then the market entered autumn again in 2018, and a not much better market early 2019.
However, next round of Halving is coming up in 2020. So, let’s all hang in there, and have faith in blockchain, which I believe is futuristic technology.