• Coinbase International has added a pre-launch markets feature that allows some users to trade perpetual futures contracts on tokens that are not on spot exchanges.
• The pre-launch markets are available only to eligible institutional users via Coinbase International and retail traders via Coinbase Advanced outside the US, Canada, and the UK.
• Once the underlying token is launched, the pre-launch futures contract will convert into a standard perpetual contract.
Coinbase has introduced a new pre-launch markets feature that lets traders speculate on the future prices of tokens before they are listed on spot exchanges. The first pre-launch contract went live this week.
What Are Pre-Launch Markets?
Pre-launch markets allow traders to participate in price discovery and take positions on upcoming crypto projects on Coinbase ahead of an official launch. Once the token goes live, the pre-launch futures convert into standard perpetual contracts.
Differences From Regular Futures
Pre-launch futures have some key differences compared to perpetual futures contracts:
- Pre-Launch Index Price based on 4-hour EMA of mark prices, not spot price
- Maximum 2x leverage versus 10x leverage on perpetuals
- Lower liquidity and higher volatility expected
- Higher risk of auto-deleveraging
- Smaller position size limit of $50,000 notional
Availability
The new pre-launch markets are currently only accessible to eligible institutional users on Coinbase International Exchange and retail traders on Coinbase Advanced outside of the US, Canada, and UK.
Conclusion
The pre-launch markets feature allows Coinbase users to participate early in price discovery and trading of highly anticipated new crypto assets in a secure, regulated environment. However, the markets come with higher risks like lower liquidity.
