Introduction
In the world of digital cryptocurrencies, two primary types of consensus drive investment psychology: rational and irrational.
- Rational Consensus: Reflects calculated decisions based on market demand, business models, and cost analysis. Institutional investors dominate here, prioritizing safety over high-risk bets.
- Irrational Consensus: Driven by community hype, expecting price surges from "pump signals" or news. These tokens often fade after short-lived rallies.
This analysis focuses on KuCoin Shares (KCS), applying four valuation models to assess its investment safety margin.
Token Valuation Models
1. TVEV Model: Trading Volume vs. Market Valuation
Formula:
TVEV = (Platform Token Market Cap) ÷ (Exchange’s Daily Trading Volume) Insights:
- Lower TVEV = Token may be overvalued.
- Higher TVEV = Token potentially undervalued.
Case Study:
- KCS: Alex Svanevik’s CoinFi report highlights KCS’s TVEV as disproportionately high compared to BNB and HT, suggesting significant undervaluation.
- OKB: Priced at $3.7 at launch, closely matching TVEV’s $3.8 prediction, validating the model.
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2. Relative Valuation Method
Formula:
Target Token Price = (Target Token Burn Amount × Benchmark Token Price) ÷ Benchmark Burn Amount Application:
- Binance’s Q1 2019 burn data vs. KuCoin’s suggests KCS could be valued at ¥135 (~$20). Current price (~$1.2) implies a 1,600% gap, urging caution.
Limitation:
Over-reliance on burn metrics ignores ecosystem factors.
3. Fisher Equation (MV = PQ)
Components:
- M (Market Cap) = PQ/V
- V (Velocity/Token Turnover) = 10% for KCS (June 10 data).
Calculation:
- KCS’s "true" market cap: ¥6.6B vs. actual ¥670M, indicating potential 10x growth.
Vitalik’s Take:
Endorses Fisher for transactional tokens, adding credence to KCS’s undervaluation.
4. Transparency & Ecosystem Premium
Key Factors:
- Financial Transparency: KuCoin’s regular disclosures (e.g., Estonia licensing) boost investor trust.
- Ecosystem Expansion: KCS fuels DeFi (ETHLend, AavePay), e-commerce (240K merchants via CoinPayments), and DEX partnerships (ARWEN Beta).
Comparison:
KuCoin mirrors Binance’s early-stage BNB trajectory, with aggressive global合规 efforts.
FAQs
Q1: Is KCS a safe long-term investment?
A: Its undervaluation per TVEV/Fisher models and expanding ecosystem suggest strong upside, but diversify to mitigate exchange-specific risks.
Q2: Why does KCS’s price lag behind BNB?
A: Binance’s first-mover advantage and broader adoption currently outpace KuCoin’s growth phase.
Q3: How accurate is the relative valuation method?
A: Useful for benchmarks, but combine with other models (e.g., TVEV) for holistic insights.
👉 Learn why platform tokens like KCS are pivotal in crypto’s future
Conclusion
KCS exemplifies a token straddling rational metrics (undervalued per models) and irrational hype (community price targets). Investors should:
- Leverage TVEV/Fisher for fundamental analysis.
- Monitor KuCoin’s compliance and ecosystem developments.
- Avoid overexposure; even "undervalued" tokens carry volatility.
Always conduct independent research before investing.