Despite its name, the platform is not officially associated with the KuCoin exchange, nor is it built by any of the members of its core team. Most of the developers behind the platform are not public.
KCC Chain is built around a single purpose: “Accelerate the flow of value around the world without borders”. The platform attempts to reduce friction in the crypto space and stand out from other Tier 1 blockchains by its high speed, low fees, and direct compatibility with Ethereum and ERC-20 smart contracts.
As a high-performance platform, KCC Chain boasts higher throughput and lower transaction fees than Ethereum and many other blockchains, but it is undeniably more centralized, due to the fact that there are currently only a dozen nodes involved in maintaining its integrity.
The platform attempts to mitigate this in some way through the use of a community DAO, known as “GoDAO”. This allows holders of the KuCoin Shares (KCS) token to participate in on-chain governance, helping to shape the development of the KCC ecosystem by raising and voting on governance proposals.
KuCoin Community Chain is unusual among blockchains in that instead of creating an entirely new gas token, the developers opted to incorporate the pre-existing KCS token instead. As a result, users have to spend KCS when sending transactions on the blockchain.
How does that work?
KCC Chain is a fork of Ethereum. This means that much of its architecture remains the same, which ensures that Ethereum DApps can easily be implemented and/or migrate to KCC Chain if they wish. Similarly, this means that many popular Web3 wallets will work with the platform, including MetaMask.
The platform maintains consent using a system known as “Proof-of-Staked-Authority” or PoSA. This is a modified version of Proof-of-Stake that requires node holders (known as validators) to put their identity into play rather than a specific number of KCS tokens to participate in the block production and verification process. The same consensus mechanism is used by the BNB chain.
These validators receive the transaction fees contained in each block in exchange for their honest participation in the network’s consent. In a later update, KCC Chain will introduce staking, which will allow non-node holders to stake their KCS tokens to earn a fraction of the network’s transaction fee revenue, similar to Delegated-Proof-of-Stake blockchains.
Due to its relatively low activity, most blocks remain empty, which means that the platform generates very little revenue from transaction fees. According to data from KCC Chain’s official block explorer, daily transaction fee revenue is generally between $150 and $300/day, to be shared between participating nodes.
At the time of writing, KCC Chain has a total of 12 nodes in operation, one of which has been inactive for more than a month. The platform should support up to 29 validation nodes. New validators can only be voted in place by existing validators.
Since KCC Chain is an independent blockchain, it also has its own native gas token, known simply as KuCoin Shares (KCS). KCS was initially launched as an ERC-20 token on the Ethereum blockchain, but partially migrated to KCC Chain when its mainnet was launched in June 2021.
For more information about KCS and its other utilities, see the recently updated KCS white paper.
The KCS token is now being used to pay for smart contact transactions and regular transactions on the KCC blockchain.
Resources can be migrated to/from KCC Chain through the use of the KCC Bridge. This currently supports transfers between KuCoin Community Chain and Ethereum, BNB Chain, Polygon, Fantom and Avalanche.
What makes the KCC chain unique?
KCC Chain faces stiff competition from other currently more successful blockchains associated with the exchange, including Binance’s BNB Chain, OKEX’s OKC Chain, and Crypto.com’s Cronos Chain.
To help you succeed in an increasingly competitive Level 1 landscape, KCC Chain includes a number of distinctive features.
Unlike many other blockchains associated with the exchange, KuCoin Community Chain is not owned and operated by a centralized exchange. Instead, it was built by members of the KuCoin community. For this reason, it claims to be more decentralized than many of its competitors, since it is free to evolve according to the whims of the community – rather than in response to regulations or the will of its creators.
As a fork of Go Ethereum, KCC Chain shares many of its features, probably the most important of which is its compatibility with the Ethereum Virtual Machine (EVM). This allows developers to deploy their Ethereum code directly on the KCC chain with little or no modification needed. KCC Chain hopes that its low fees and high throughput will be enough to attract developers and projects away from ethereum chains (and other EVMs) to its platform.
KCC Chain has a block time of only 3 seconds (the same as BNB Chain). For this reason, the average transaction will typically reach its purpose within 3 seconds. This makes it about four times faster than Ethereum, which currently has a block time of ~13 seconds.
While the developers have not yet provided official statistics on its throughput, it is reasonable to assume that it is about 100-300 transactions per second (TPS), which is similar to BNB Chain.
Low transaction fees
KCC Chain is currently one of the cheapest blockchains by average transaction fee.
Since the platform is relatively idle, the average transaction fee currently hovers around $0.01. This, however, can be expected to increase if competition for block space grows, for example if KCC Chain’s DApp ecosystem expands and/or if its user base grows.
To put this in perspective, ethereum’s average transaction fee is around $1.5 while the average fee on Solana is 0.000005 SOL (equivalent to < $0.001).
Does KuCoin Community Chain have Any DApps?
Despite the launch of its mainnet in June 2021, KuCoin Community Chain has so far seen relatively little uptake among developers, and only a small handful of applications are currently active on the platform.
The three most popular in terms of total locked value (TVL) are:
- MojitoSpalla: An automated market maker that runs exclusively on KCC. The platform allows users to trade digital assets and provide liquidity to earn returns in the form of trading fees. Like many AMM, it also features a variety of yield farms, where users can bet their MojitoSwap LP tokens to earn additional rewards.
- KuSwap: Probably an entire DeFi ecosystem in itself, KuSwap is similar to MojitoSwap in that it includes both AMM and yield farm functionality. But this is extended with additional features such as an NFT marketplace, an NFT trade battle game, a lottery, and a vault system. It also has its own IGO+ IDO incubator and springboard, which hosted 4 projects at the time of writing, raising $1.16 million in total.
- KillSwitch: A DeFi returns aggregator, KillSwitch allows users to maximize the returns they earn on their KCC Chain-based assets through the use of a variety of specialized tools. Some of its additional features include an automated take profit and stop-loss tool, a kill position option, and a boost tool, all designed to increase returns and minimize losses.
Over the past year, the platform has seen the total locked value (TVL) in its DeFi protocols swell from $0 million to over $76 million at its peak. The vast majority of this TVL is associated with MojitoSwap, which has an impressive dominance of more than 86%. Other DApps on KCC Chain currently have a TVL of less than $1 million.
Overall, more than two dozen DApps operate on KCC Chain, but most of them have very few users and limited utility.
To help expand its ecosystem and build its DApp landscape, KuCoin Community Chain recently announced a $50 million ecosystem acceleration program.
“As an important part of KuCoin’s decentralized business ecosystem, KCC will enter an explosive development phase in 2022. Therefore, we would like to establish the KCC ecosystem efficiently and quickly through a series of ecosystem incentive plans. At the same time, we will continue to explore high-quality on-chain projects and hidden gems for KCS enthusiasts and KuCoin users, while improving the ecosystem,” said Leandre Niu, head of KCC, in the press release.
It is unclear whether the program was a success. KCC Chain remains relatively underdeveloped compared to competing EVM chains.