Coinbase International To Launch Pre-Launch Trading Platform for Crypto Projects
Summary:
Coinbase International is planning to introduce a launchpad for potential cryptocurrency projects, similar to centralized exchanges like Binance and OKX. The pre-launch markets will allow trading in token perpetual futures contracts before their official release. Both retail and institutional investors will have access to this feature, although high risk of volatility and liquidation is anticipated. Furthermore, pre-launch tokens may not necessarily go for full listing. Launched in May 2023, Coinbase International holds a class F license from the Bermuda Monetary Authority.
With a similar approach to centralized exchanges like Binance, Bybit, Bitget, and OKX, Coinbase International is moving towards the establishment of a launchpad intended for emerging cryptocurrency projects. In a revelation made on June 17, the developers at Coinbase stated that the pre-launch markets could be used by users for trading in never-before-launched token perpetual futures contracts. They further added, once the respective token goes live on the relevant spot exchanges, it'd be transformed into a standard perpetual contract. Both institutional investors through Coinbase International and retail traders through Coinbase Advanced will have access to this feature. However, it's worth noting that pre-launch market assets have their initial margin capped at 50%, implying twice the leverage, and a notional position cap at $50,000 for every token.
Diverging from conventional standard futures, these constructs utilize an index price mechanism that's unique, applying a 4-hour exponential moving average (EMA) to the mark prices of the instrument when determining the Pre-Launch Index Price. Given the high risk associated with pre-launch markets, developers caution that users are likely to encounter lower liquidity, increased volatility, and a higher likelihood of liquidation risk. Furthermore, these markets will not receive support from the exchange's Liquidity Support Program, which might result in an increased possibility of auto-liquidation.
The prospect also exists for pre-launch tokens to not reach the complete listing process. As shared by the team at Coinbase International, there's a possibility, out of their control, which could halt the underlying token from launching. If such a decision is taken, the transformation of the pre-launch market into a standard perpetual futures market might be hindered and subsequently, could be delisted or suspended. It's pertinent to mention that Coinbase International, which came into existence in May 2023 and operates under a class F license from the Bermuda Monetary Authority (BMA), is the foreign branch of the better-known U.S.-based exchange.
Related: The integration of Coinbase International in Fireblocks for perpetual futures and spot trading is now live.
Published At
6/17/2024 10:00:00 PM
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