Coinbase is gearing up to roll out a new feature that will allow users to trade new crypto tokens ahead of their launch.
The Coinbase International Exchange and Coinbase Advanced will become possible traders in eligible jurisdictions outside the US, UK and Canada to purchase perpetual futures contracts for assets not yet listed on spot exchanges.
When the underlying asset of a pre-launch perpetual futures contract is actually listed on a stock exchange, the contract is converted into a standard perpetual contract.
Coin base say the upcoming feature will allow traders to “participate in price discovery,” through the exchange warns that pre-launch markets carry increased risks.
“Given the risky nature of pre-launch markets, these markets are more susceptible to lower liquidity, higher volatility and greater liquidation risk. Please note that pre-launch market positions will not be allocated to participants in our Liquidity Support Program (LSP). As such, these markets are at greater risk of automatic deleveraging compared to standard perpetual futures.”
Coinbase Advanced is the exchange’s advanced trading platform and will offer pre-launch markets for retail traders, while the Coinbase International Exchange will offer the instruments to eligible institutional users.
According to Coinbase, the pre-launch perpetual futures contracts will have funding rates that use the same formula as standard perpetual futures.
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