KuCoin has become the latest cryptocurrency exchange to start offering derivatives products to users. According to a press release, its KuMEX trading platform is live in public beta and will start off with a Bitcoin contract, offering up to 20x leverage. The public beta of KuMEX will be used for simulated trading. Users cannot deposit and withdraw cryptocurrencies in the public beta phase.
According to CoinDesk, KuMEX utilises a Bitcoin spot index with a volume-weighted average of the Bitcoin price in USD across six exchanges: Coinbase Pro, Bitstamp, Kraken, Gemini, Liquid and Bittrex. The exchange stated that the spot index avoids a contract being liquidated because of low liquidity or large price fluctuations. In addition, the balance will be disclosed on the platform each day making the process transparent.
The platform is offering a lower investment threshold compared to similar services. It currently supports three types of orders: limit orders, market orders, and stop orders. After the actual launch of KuMEX, the platform will use 50% of the net revenue from KuMEX for KCS Bonus distribution for KCS holders.