Have you read about or heard about the so-called “Burning Drop” on Kucoin? What is it all about? How does it work? In this short article, I will explain the concept in a very easy way!
There are lots of ways in which you can buy tokens for different cryptocurrencies. The most common way is to go to an exchange and then to buy it by placing an order. But, there are also other ways in which you can buy tokens. Most cryptocurrencies have a so-called “TGE (Token Generation Event)” in which the tokens are created. But, there is a goal to spread the token around to as many people as possible. How is this done?
A common way to spread tokens is through token sales. Binance has such token sales on their “Launchpad”. Kucoin has similar token sales at their “Spotlight” page. These are not frequent, and there are normally only a few in a year.
Then you have so-called “Launchpools” in which you stake a single or a combination of several tokens to earn that given token. This is something you commonly meet on both ByBit and Binance.
What is a “Burning Drop” on Kucoin?
The “Kucoin Burning Drop” is very similar to the launchpools on Binance and ByBit. There is, however a small difference. How does it work?
Normally there is a period of a few hours in which you can subscribe for the “Burning Drop” on Kucoin. In this period, you can decide to stake KCS to earn the given cryptocurrency. There is normally a cap of how many KCS-tokens you can stake, often this is around 350 KCS per account.
So far this is very similar to the launchpools as we know them at other exchanges. But, what is the difference?
After you have submitted your tokens for the “Burning Drop” you can lean back. You will receive your rewards over time, but the first part of your tokens will be received in time for the TGE in which trading of the given token starts on Kucoin. You lock up your KCS for a certain number of days for the “Burning Drop”, but you will receive all this in return as soon as the “Burning Drop” is finished.
Why do they call it a burning drop?
If everyone would submit the same number of KCS-tokens, everyone would receive the same number of the given cryptocurrency. But, to make it a bit more interesting, Kucoin has added an additional feature. What is it?
As you have submitted your tokens and the submission period has come to an end, there are a couple of hours in which you can burn KCS-tokens (in addition) to speed up your computing power. What is that about?
Imagine that you have ten cars standing next to one another. All of them submit 350 KCS to a “Burning Drop.” By default, they will receive the same number of the token distributed through Kucoin. But, just before the event starts, there is an option in which the cars can buy a boost from the organizer. Those who buy the boost will gain additional horse-powers that makes the car go faster. As a result, they will receive a better price by the end of the race.
The additional horse-power can be bought by burning KCS tokens. The tokens you burn are in addition to the KCS-tokens that you have registered for the event.
How much KCS should I burn?
Most drivers don’t want to burn KCS for an additional turbo. In other words, if you decide to spend 0.5 KCS during the period in which you can burn KCS-tokens, you will get an additional boost that will give you a higher speed than 80% of the other drivers. You should experiment throughout the different “Burning Drops” at Kucoin, and you will find a pattern that should fit you.
But, do not burn a lot of tokens, because then you might up burning KCS tokens worth more than the value of the tokens you receive once the event is over. Once again, be careful and experiment!
I hope these short instructions have helped you better understand the “Burning Drop” events on Kucoin.
