Coinbase's pre-launch marketplace allows users to enter into perpetual futures contracts for tokens that have not yet launched. These instruments are converted into standard perpetual contracts once the underlying tokens are launched on the relevant spot exchange.
This facility is available to institutional investors through #Coinbase International and to individual traders through Coinbase Advanced. The initial margin requirement is 50%, the maximum leverage is 2x and the notional position limit is $50,000 per #token .
The pre-launch market introduces a unique mechanism for determining the index price. Instead of the traditional method, a four-hour exponential moving average (EMA) from the instrument's mark price is used to determine the index price before launch. This approach is intended to provide a more stable price structure during the pre-launch phase.
What is the impact on the crypto industry?
The introduction of Coinbase International's pre-launch marketplace could have major implications for the crypto industry. It is a new way for traders to gain access to tokens before they become publicly available.
By offering the ability to speculate on the future value of these assets, Coinbase provides a tool that could be of interest to both institutional and retail investors interested in early-stage investments.
However, Coinbase makes no secret of the fact that these markets are very risky. Early-stage markets are usually characterized by low liquidity, high volatility and high liquidation potential.
In addition, these instruments are not included in Coinbase's liquidity support program, which is a concern for traders. The fact that the underlying token may not be launched is also a serious risk, as it could lead to the freezing or removal of the pre-launch market.
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