According to the latest announcement from the American exchange Coinbase, a new “pre-launch market” feature will be opened to users in certain regions, allowing users to trade standard contracts for tokens that are about to be listed on the exchange. The Block revealed that this service may go live next Monday.
Following in the footsteps of other offshore centralized exchanges (CEX), Coinbase recently announced that it will launch a “pre-launch market” for regions outside the United States, United Kingdom, and Canada, providing standard contract trading services for tokens about to be listed:
The pre-launch market on Coinbase will allow users to participate in the price performance of upcoming projects on a trusted and secure platform.
In terms of trading limits, the initial margin limit for pre-launch market assets is 50% with 2x leverage, and the position value limit for each token is $50,000.
In addition, once the related tokens are listed on spot exchanges, the standard contracts in the pre-launch market will seamlessly convert to perpetual contracts.
It is reported that eligible institutional investors can trade through Coinbase International, while retail traders can trade through Coinbase Advanced.
Coinbase also clarified the pricing mechanism, stating that market tokens use a 4-hour Exponential Moving Average (EMA) as the pre-launch index price, unlike standard contracts.
Regarding the risks of the pre-launch market, Coinbase stated:
Due to the high-risk nature of the pre-launch market, this market is more likely to have lower liquidity, higher volatility, and higher liquidation risks.
Furthermore, Coinbase added, “Therefore, the pre-launch market is not protected by Coinbase’s Liquidity Support Program (LSP).”
Finally, the announcement noted that tokens on the pre-launch market may still not be able to be listed on spot or perpetual contract exchanges. If a token fails to complete the relevant processes, the pre-launch token may be suspended or delisted.
Currently, Coinbase’s legal battle with the SEC is ongoing, and the recently passed bipartisan “Financial Innovation and Technology Act of the 21st Century (FIT21)” may bring about significant changes to the case, altering the SEC’s broad jurisdiction in the cryptocurrency field.
At the same time, the years-long litigation between the exchange and law enforcement agencies will play a crucial role in the future of cryptocurrency regulation in the United States and have an important impact.