The week of March 8-15, Kuailian will launch a process by which any client who is not happy, does not have confidence in the project or simply wants to leave, will be able to do so.
This is an exceptional event as it means being able to leave Kuailian before the end of the contracts.
Anyone who does not take advantage of this measure may also request the reimbursement of their funds at the end of the contract, which is 1,000 days for kuais and 183 days for new SPU licenses.
Thus, anyone who has exchanged his kuais for SPU and who has already met this deadline of 183 days does not need to leave during this week. He can do it anytime he wants.
In any case, this extraordinary moment is a good opportunity to reflect and present 5 reasons to continue with Kuailian and 5 reasons to leave.
As always, what I write below is my personal opinion, with which you can agree or disagree.
5 reasons to stay
1. The possibility of leaving early
The simple fact that Kuailian offers the opportunity to leave to whoever wishes by recovering the collateral that corresponds to him is already a guarantee.
This implies that Kuailian has the necessary funds to face these exits. In other words, the returns that Kuailian has been paying throughout this time do not come from the entry of new customers, as would be the case with a pyramid scam.
If this had been the case, Kuailian would no longer have the necessary funds to deal with these potential exits.
2. The value of the pool is verifiable
This point is a consequence of the previous one.
In order to face the liquidations, Kuailian has divested all the capital that it had in staking and has deposited it in 3 public Wallets of 3 very stable cryptocurrencies: Polkadot, Tron and Cardano:
- Polkadot Wallet: https://polkascan.io/polkadot/account/13osczufcBPQkTeahKU1Qd3pj52Hej6L1fo775NPyQ39Pccn
- Tron Wallet: https://tronscan.org/#/address/TB8A5zGSEKWyfjsUDY5fD7gQw9LRnX9kja
- Cardano Wallet: https://explorer.cardano.org/en/address.html?address=addr1q8d06cm85ax577y24c9nf3c4qsa9enaqavdkf3gr85z0m2k6l43k0f6dfaug4tstxnr32pp6tn86p6cmvnzsx0gylk4q4genss
Adding the balance of these 3 wallets we can see the total value of the current pool, which is around 100 million dollars (varying depending on the value of the 3 cryptocurrencies).
These funds will be available in these portfolios until the liquidations of the clients who request to leave are completed. The remainder will be what goes to the new staking pool.
3. A remarkable track record of returns
The returns that Kuailian has been distributing throughout this time have been, to say the least, remarkable.
With its best months and its worst months, but the data is what it is.
The average monthly returns of Kuailian in the global of 2,020 have been 3.49% for Low Risk, 7.78% for Medium Risk and 12.52% for High Risk.
4. The guarantee of more than two years of history
More than two years of experience in the crypto world is a lifetime.
Along the way, we have seen many projects born and disappear, in some cases Kuailian’s competitors, while Kuailian has shown the ability to adapt and overcome difficulties, which have not been few.
The right decisions have not always been made. As in any other field, mistakes have been made, but Kuailian has been able to learn from them and correct them.
Technologically it has evolved, new products have been developed, the services available to users are continuously being improved … in short, Kuailian is constantly innovating.
And as a sample, the new Tron blockchain-based payments system that will see the light of day in the coming weeks.
5. A promising future
Kuailian faces this new stage with great strength and with a spectacular Roadmap.
The imminent commercialization of the new multistrategy SPU licenses will be followed by other exciting projects such as asset tokenization or Kuailian Travel, among others.
And all of them will provide new sources of revenues for Kuailian customers.
5 reasons to leave
1. Problems with payments
The second half of 2020 has been a true nightmare when it comes to payments.
Kuailian has always stated that his goal was to distribute returns on a daily basis. And while the ETH blockchain has worked in a reasonable way, Kuailian has kept his word.
But since DeFi projects revolutionized the ETH blockchain and skyrocketed fees for operating on the network, the systematic daily payments have been a real headache.
Kuailian’s first step was to accumulate payments and distribute it once a week to minimize commission spending, while looking for an alternative solution.
The workaround was the adoption of the Zksync Sidechain, which turned out to be a real fail. Which forced Kuailian to go back to the previous step.
It is true that Kuailian has been paying what was due and that the problems have been outside the company, but the reality is that the commitment of daily payments has not been met and that delays have been common.
2. The absence of supervision tools
If something has been missing from Kuailian in all this time to dispel any type of doubt, it has been to have monitoring tools, either for the clients themselves or to obtain the endorsement of an independent third party.
Starting with the Deloitte audit, which was started but never completed (it is not clear whether Kuailian’s or Deloitte’s fault) and ending with the Singapore MAS audit to obtain the SVF license, which should have been completed by end of 2,020 but that to this day has not finished yet.
It is true that licenses to operate in Estonia have been obtained along the way, which also require certain audits, but they do not replace those mentioned above.
In principle, with the new instance that Kuailian is currently setting up, the monitoring possibilities will be much higher, and an audit will even be completed by one of the Big 4. We will see if this time it comes true, but so far, the only source of information has been Kuailian itself.
Which has given rise to all kinds of suspicions, speculations and attacks.
3. Lack of communication
Another problem that Kuailian has had has been the flow of communication with its customers.
As it’s normal, the way has faced many problems.
While Kuailian has been diligent in solving problems, the same cannot be said for communication.
When a problem has arisen, it has been common for the company to not react with the necessary agility. It has been slow to give official explanations and to communicate the action plan to solve it.
When the information has arrived, most of the times it has been clear, concise and reasonable, but too many times it has arrived late.
Which has given rise to nerves, speculation and real crises that, if they had been explained in a timely manner, could have been avoided.
If we add to that a support department that is probably undersized and that in many cases does not provide sufficiently detailed answers, the feeling of abandonment is sometimes remarkable.
4. Decreasing returns
This is an issue that has generated a lot of controversy, since the yields have invariably been decreasing gradually.
While it is true that, in general terms, the returns have been very good, it is also true that month after month they have been decreasing.
But this decrease has not always been real. It has been the result of an accounting effect due to the way they are measured.
So far Kuailian has used ETH as its reference value.
Yield payments were (and are still being made) in ETH, and returns were measured based on ETH.
This has had a very negative impact on returns driven by the great growth that ETH has had, much higher than that of any other token that Kuailian stakes on.
The final effect is that, although Kuailian may be increasing its returns in generated tokens, those tokens could each time be exchanged for less ETH, since ETH was becoming more and more expensive. Given the paradox that an increase in profitability in tokens, in the eyes of the client, translated into a decrease in the ETH obtained, and consequently, in profitability.
As much as those ETH received could have more value, the perception was that profitability was going down, which logically nobody likes.
5. The calculation basis in ETH
For me, this has undoubtedly been Kuailian’s most important mistake in its entire career and it has caused a serious sustainability problem that is difficult to solve.
Until now, when a client bought licenses, the ETH’s that client was contributing were taken into account and compared with the total licenses contributed by the rest of the clients. That determined his percentage of participation, which is the basis for both the distribution of the daily returns generated by the pool and for the recovery of the collateral at the end of the contract.
The cost of the licenses is always the same, 100 USD, which was paid with its equivalent value in ETH. But the price of ETH has been increasing in an unthinkable way in the last year.
Thus, two people who would have made the same dollar contribution for the purchase of a license, based on the price of ETH at the time of purchase, were contributing very different amounts of ETH. Whoever bought the licenses with very low ETH contributed 10 or 15 times more ETH than who bought with more expensive ETH. And therefore, their % of participation and consequently, their returns, were absolutely unbalanced.
With an ever-higher ETH scenario, the situation becomes unsustainable, as new partners who buy licenses get a ridiculous share percentage compared to customers who have been in Kuailian longer.
Given this, Kuailian decides, correctly, that the new products that it commercializes will no longer have ETH as the basis of calculation, but USDT, or what is the same, the dollar.
Thus, two people who buy licenses worth $ 100, regardless of when they do so, will have exactly the same percentage of participation, which seems the most reasonable and solves the problem of taking as the basis of calculation a reference whose value is not fixed .
The problem arises with the transition from one system to the other.
Whoever entered Kuailian with certain rules of the game, which in the end have turned out to be very favorable for him, will hardly accept that, unilaterally, Kuailian changes them.
It is a problem that is difficult to solve, since what is a logical measure to reestablish a more balanced distribution at the collective level, is a serious damage for certain people at a private level, to which, in my opinion, they have all the right in the world to stand against.
Kuailian’s trajectory has not been a bed of roses at all. It never is.
There have been obstacles, difficulties and problems, so it is understandable that many people have become disenchanted and take this opportunity provided by the company to abandon the project.
But my overall assessment after more than a year as a client is positive and I am still enthusiastic about this project, which I think will still give us many more joys (and why not say it, the occasional headache as well).
If you want to join Kuailian, you can do so through this link.