Coinbase International follows in the footsteps of centralized exchanges like Binance, Bybit and Bitget
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Coinbase International is following in the footsteps of centralized exchanges such as Binance, Bybit, Bitget and OKX in creating a launchpad for burgeoning cryptocurrency projects.
“Pre-launch markets allow users to trade perpetual futures contracts on tokens that have not yet launched,” Coinbase revealed on June 17, adding: “When the underlying token is launched on applicable spot exchanges, the instrument converts to a standard perpetual contract. » “
This feature will be available to institutional investors through Coinbase International and retail traders through Coinbase Advanced. Pre-launch market assets are capped at an initial margin of 50%, or 2x leverage, and a maximum virtual position of $50,000 per token.
The instrument also works differently from traditional standard futures contracts:
“Pre-launch markets have a different index pricing mechanism than standard perpetual futures contracts and use a 4-hour exponential moving average (EMA) of instrument prices relative to the pre-market index price. -launch.”
Coinbase also warned that “due to the high-risk nature of pre-launch markets, these markets are more vulnerable to decreased liquidity, increased volatility, and increased liquidation risk.” Additionally, pre-launch instruments are not supported by the exchange’s liquidity support program, leading to an increased risk of automatic liquidation.
It is also possible that pre-launch tokens may not reach the full listing process, as Coinbase International explains:
“There is a risk – beyond Coinbase’s control – that the underlying token may never be launched. If such a decision is made, the pre-launch market will not be able to transform into a standard market for perpetual futures contracts, and it may have to be suspended and/or delisted.
Launched in May 2023, Coinbase International is the offshore arm of the American exchange of the same name. The platform holds a Class F license from the Bermuda Monetary Authority.
Related: Fireblocks Adds Coinbase International for Perpetual Futures and Spot Trading