Pool-X Earn

KuCoin Staking Review

KuCoin is one of the many crypto exchanges that have capitalized on the explosive staking demand by creating services specially designed for stakers. Interestingly, KuCoin has taken this a step even further by creating a staking protocol from the ground up such that users can enjoy even more functionality and earn more rewards while they are at it. The company calls this product Pool-X. In this guide, I will be discussing everything you need to know about KuCoin’s staking services and how you could potentially earn passive income. Also, this guide will be highlighting some of the downsides of KuCoin’s staking service.

What is KuCoin?

Before we get into the fundamentals of the staking infrastructure available on the KuCoin platform, let us first explain how KuCoin works. You see, KuCoin is one of the most prominent exchanges operating today. The platform has managed to carve a name for itself in the crypto industry, thanks to its penchant for enabling sophisticated solutions and still delivering optimum usability. More importantly, the exchange has continued to evolve by adapting to new trends as at when due. Hence, unlike many exchange platforms that have struggled to keep their business afloat, KuCoin has remained a prominent name in the crypto exchange market.

And so, it is no surprise that KuCoin has joined the staking bandwagon seeing that a lot more investors are interested in generating earnings even as more blockchain networks continue to adopt the proof of stake consensus mechanism. However, as you will come to notice later in this guide, KuCoin’s offering is a little bit different from what we are used to.

Staking on KuCoin

For the uninitiated, staking is the process of locking coins on blockchains or smart contracts in order to earn more coins. In most cases, staking is a mechanism designed to ensure that blockchain networks are decentralized. Interested participants show their intent to become validators by locking coins on the blockchain. In turn, they become eligible to receive rewards in the form of the blockchain’s native coin.

While this explanation encapsulates the concept of staking, it does not tell the entire story. Notably, stakers often have to ensure that they meet certain financial and technical requirements. For one, they may have to lock a specific amount of coins for a specific duration to become eligible to earn staking rewards. Likewise, they are required to keep their staking node online to avoid losing a portion or the entirety of their staked coins

Due to the sometimes burdensome requirements of staking, exchanges and other service providers have opted to offer a more simplified way of staking. More often than not, these solutions function as third-party staking pools that provide a high level of flexibility. On these platforms, you will likely find that they do not impose a fixed staking capital or fixed staking duration.

It is worth mentioning that KuCoin ticks all of the right boxes when it comes to staking. As mentioned earlier, the exchange has also created staking pool services where stakers can enjoy all the flexibility they need. Like most exchanges, KuCoin set out to offer users an easy-to-use alternative to self-staking strategies. After exploring different ways to improve users’ staking experience, the platform eventually settled for a sophisticated system called Pool-X in 2019. Pool-X is simply a proof of stake (PoS) mining tool that combines elements of staking, liquidity mining, and trading effectively.

Another interesting thing about this tool is its use of the Proof-of-Liquidity for the issuance of POL, a Pool-X native token distributed as rewards to stakers. POL is a decentralized token issued by Pool-X to buoy the platform's rewards mechanism as well as to make liquidity trading a lot more seamless. Below are the core features of Pool-X

Seamless Staking

The primary function of Pool-X is staking. The system is optimized to give users all the tools they need to stake seamlessly. Part of the advantage of using Pool-X is that rewards can be received daily. As part of its push for effortless staking, Pool-X also offers products that do not impose locking periods.

Liquidity trading market

Another important detail you need to know about Pool-X is that it offers the means to trade locked tokens. If you need to lock coins for 3 months before you become eligible to withdraw earnings, you can utilize KuCoin’s liquidity trading market to sell the locked coins for a more liquid digital asset. For instance, it is currently impossible for ETH 2.0 stakers to withdraw their earnings, at least not until the latter phase of the ongoing Ethereum upgrade launches. While this is a given, Pool-X has enabled a trading market that specifically caters to stakers. Here, an ETH 2.0 staker can tokenize his staked coins and trade them for other cryptocurrencies. In summary, this tool allows users to trade staked tokens for non-staked ones.

Double rewards

Pool-X also enables the chance to generate double earnings. The primary income-generating system is the staking pool. Each staker is eligible for staking rewards, depending on the APR of the staked coins and the staking duration. Apart from this source of income, Pool-X also shares 250,000 POL tokens among stakers daily.

What are the supported coins?

Remarkably, Pool-X features a wide variety of tokens you can stake using its infrastructure. Some of them are HYDRA, LUNA, ATOM, KCS(Beta), FEAR, VAI, ALPACA, HOTCROSS, HORD, TOKO, MATIC, KSM, DOT, TRX, VSYS, WAN, EOS, TOMO, ADA, SUKU, XNL, OPUL, OUSD, BEPRO, IDEA, SWINGBY, ANC, ZIL-gZIL, and LINK.

Flexible staking vs fixed staking

Before staking on Pool-X, please note the type of pools your preferred coins fall under. Here, you can decide to opt for flexible staking or fixed staking. As its name implies, flexible staking does not impose lockup periods on stakers. However, flexible products come with redemption dates as stakers have to wait for a specific number of days before they can withdraw their staked coins.

During this redemption period, the staked coins do not accrue staking rewards nor does it attract POL rewards. For example, if the redemption date of staking a token is 4 days, you will have to wait for another 4 days after triggering the redeem command before you can access your digital asset. All through this 4-day redemption period, you will not receive staking and POL rewards. On the other hand, fixed products specify fixed lockup periods at which stakers can start withdrawing their staking capital.

How to stake coins on Pool-X

To start earning staking rewards on Pool-X, all you need to do is visit the Staking page on the KuCoin website. Here, you will find the list of supported tokens and the details about their interest rates as well as their redemption periods. Also, you will notice that the lists are grouped based on the type of rules governing them. Make sure you understand the requirements for each list before committing to one. For instance, when you press the Promotion button, you will access the tokens that fall under the flexible and fixed staking options. Already, you know that the flexible products come with redemption periods while the fixed ones impose specific staking periods.

Once you have made a choice, click the Subscribe button to start staking the selected coin. I assume that you already have an account on KuCoin. If that is not the case, you will need to register an account and deposit the staking capital. Next, you need to navigate back to the staking page and repeat the process highlighted earlier. Since you now have an account, clicking the Subscribe button will take you to a window where you can enter the amount of the coins you want to stake and complete the process.

How to redeem earnings on Pool-X

For those opting for fixed staking, Pool-X will automatically initiate the redeem process immediately after the staking period has elapsed. In contrast, you can apply to redeem the earnings of other staking options at any time. The protocol will calculate the earnings based on the number of days at which your capital was actively staked.

What about fees?

Pool-X does not charge staking fees. However, it collects an 8% POL mining fee and a 5% fee for each trade executed via its liquidity trading market.

What are the pros and cons of staking on KuCoin?

The pros of staking on KuCoin

KuCoin offers double rewards

Undoubtedly, one of the most appealing things about staking on KuCoin is the possibility of earning double rewards. You are entitled to staking rewards denominated in the coin you initially staked and POL rewards.

KuCoin supports a vast array of coins

Another positive is that the staking platform of KuCoin features a wide variety of cryptocurrencies. Hence, the exchange has created a vast staking economy ideal for stakers interested in exploring multiple staking opportunities.

Pool-X supports liquidity trading

As mentioned in this guide, stakers can trade staked coins on Pool-X. This is due to the availability of tools that allow users to tokenize staked coins and exchange them for non-staked digital assets.

The platform provides a seamless staking experience

All-in-all, KuCoin excels because it has opted to simplify all of the processes involved in staking cryptocurrencies. Here, you do not need to have a specific balance, adhere to a lockup period, or take on other technically-imposing requirements.

Pool-X does not charge staking fees

Unlike most exchange-based staking offerings, you do not need to pay fees when staking coins on Pool-X. Hence, it is an affordable service for stakers. However, note that you will have to pay a 5% fee for using the platform’s liquidity trading feature.

The cons of staking on KuCoin

It is a centralized offering

Although the ultimate goal is to establish Pool-X as a decentralized offering, it currently runs a centralized model. At the time of writing, it is impossible to access the type of autonomy offered by self-staking and DeFi solutions. In other words, you may need to relinquish some control over your digital assets to the operators of KuCoin.