Coinbase International announces support for pre-launch market

Zhiyuan Sun5 hours agoCoinbase International announces support for pre-launch marketUsers will be able to trade futures of soon-to-be-listed tokens and coins on the exchange.1415 Total views1 Total sharesListen to article 0:00NewsOwn this piece of crypto historyCollect this article as NFTJoin us on social networksCoinbase International is following in the footsteps of centralized exchanges such as Binance, Bybit, Bitget and OKX in creating a launchpad for up-and-coming crypto projects. 

“Pre-launch markets allow users to trade perpetual futures contracts on tokens that have not launched yet,” Coinbase revealed on June 17, adding: “When the underlying token is launched on applicable spot exchanges, the instrument converts to a standard perpetual contract.”

The feature will be available to institutional investors via Coinbase International and retail traders via Coinbase Advanced. Pre-launch market assets are capped at an initial margin of 50%, or 2x leverage, and a notional position limit of $50,000 per token.

The instrument also functions differently than traditional standard futures:“Pre-launch markets have a different index price mechanism than standard perpetual futures and use a 4-hour exponential moving average (EMA) of the instrument’s mark prices for the Pre-Launch Index Price.”

Coinbase also warned that “given the high-risk nature of pre-launch markets, these markets are more prone to lower liquidity, higher volatility and increased liquidation risk.” In addition, pre-launch instruments are not supported by the exchange’s Liquidity Support Program, resulting in added risks of auto-liquidation.

There is also a chance that pre-launch tokens may never make it to the full listing process, as Coinbase International explained:“There is a risk — outside of Coinbase’s control — that the underlying token may never launch. If such a determination was made, the pre-launch market would not be able to convert into a standard perpetual futures market, and the market may need to be suspended and/or delisted.”

Launched in May 2023, Coinbase International is the overseas arm of the namesake United States-based exchange. The platform holds a Class F license from the Bermuda Monetary Authority. 

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