Coinbase International follows in the footsteps of centralized exchanges like Binance, Bybit and Bitget
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
