Following the trend set by centralized exchanges like Binance, Bybit, Bitget, and OKX, Coinbase International is stepping into the arena with its own launchpad designed to promote emerging crypto projects. This move marks a significant step in enhancing the early engagement and support of nascent digital currencies.
Coinbase International unveiled a new trading feature on June 17, which enables users to engage in perpetual futures contracts for tokens that are yet to be launched. This innovative approach allows for early trading activities before these tokens make their debut on the spot markets.
Transition from Pre-Launch to Standard Contracts
Once the underlying token is officially launched on relevant spot exchanges, these contracts transition seamlessly into standard perpetual futures contracts. This mechanism is tailored to provide traders with a bridge from speculative early engagement to more traditional trading frameworks.
The pre-launch market feature will be accessible to a broad spectrum of traders, including institutional investors via Coinbase International and retail traders through Coinbase Advanced. Trading conditions are set to include:
- An initial margin capped at 50%, equivalent to 2x leverage.
- A notional position limit of $50,000 per token.
Unique Aspects of Pre-Launch Markets
- Index Price Mechanism: Unlike traditional perpetual futures, pre-launch markets utilize a 4-hour exponential moving average (EMA) of the mark prices to calculate the Pre-Launch Index Price.
- Risk Factors: As highlighted by Coinbase, these markets are inherently riskier due to their potential for lower liquidity, heightened volatility, and an increased chance of liquidation. Notably, these instruments are not covered by Coinbase’s Liquidity Support Program, adding a layer of risk concerning auto-liquidation.
There exists a notable risk that some pre-launch tokens may not proceed to a full listing, as detailed by Coinbase International:
- If it is determined that an underlying token will not launch, the corresponding pre-launch market cannot transition to a standard market, potentially leading to the suspension or delisting of the market.
Launched in May 2023, Coinbase International represents the global extension of the renowned U.S.-based exchange, Coinbase. Operating under a Class F license from the Bermuda Monetary Authority, this platform aims to foster a regulated and secure environment for international crypto trading.
| Feature | Coinbase International | Binance | Bybit | Bitget | OKX |
|---|---|---|---|---|---|
| Support for Pre-Launch Markets | Yes | Yes | Yes | Yes | Yes |
| Initial Margin | 50% (2x leverage) | Varies | Varies | Varies | Varies |
| Notional Position Limit | $50,000 per token | Higher | Higher | Higher | Higher |
| Liquidity Support Program | No | Yes | Yes | Yes | Yes |
| Regulatory License | Class F, Bermuda | Varies | Varies | Varies | Varies |
The introduction of pre-launch markets by Coinbase International could potentially reshape the landscape of how new cryptocurrencies are introduced and traded. It provides:
Coinbase International’s foray into pre-launch markets is a bold initiative that blends innovation with strategic market expansion. By offering traders the opportunity to engage with upcoming cryptocurrencies at an early stage, Coinbase is setting the stage for a more dynamic and interconnected digital asset environment.
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