Coinbase Launches Initiative to Support Emerging Crypto Projects and Drive User Growth

The cryptocurrency industry, currently valued at $2.36 trillion, is attracting entrepreneurs eager to experiment, especially with the emergence of Web3. CoinBase International has decided to step forward as a promoter of emerging Web3 projects. The exchange, ranked among the largest in the world, has announced the launch of its Pre-launch Market initiative. This will serve as a springboard for upcoming crypto projects. Unlike venture capital firms that offer help through direct funding, Coinbase has chosen a way to help crypto startups while simultaneously increasing the number of users on its international and advanced platforms.

Like an initial coin offering, but different

In a Initial Coin Offering (ICO)arriving Web3 projects provide a lot of native crypto tokens that people can purchase as early adopters. This transaction brings funds to hungry businesses and offers benefits and rewards to their owners.

Meanwhile, with pre-launch markets, Coinbase will allow users to trade perpetual futures contracts on the native tokens of eligible crypto projects for similar results, the exchange She said in an official place.

“Pre-launch markets differ significantly from standard perpetual futures markets. Pre-launch markets on Coinbase allow users to participate in price discovery for upcoming projects on a reliable and secure platform. When the underlying token launches on applicable spot exchanges and the market meets our requirements for a standard perpetual future, Coinbase will begin converting the pre-launch market to a standard perpetual future,” the exchange explained.

Coinbase will not roll out this feature to all of its customers. Only institutional and retail investors will be able to access this service via Coinbase International and Coinbase Advanced respectively. The exchange explained that trading on pre-launch markets carries more risks, as unlaunched tokens can be volatile.

“Given the high-risk nature of pre-launch markets, these markets are more prone to lower liquidity, higher volatility and increased liquidation risk. Positions for pre-launch markets will not be allocated to participants in our Liquidity Support Program (LSP). Therefore, these markets will be at greater risk,” her blog noted.

Rules governing Coinbase’s pre-launch marketplace initiative

Assets listed on Coinbase’s pre-launch markets will be limited to an initial margin of 50%, or double leverage. The notional position limit has been capped at $50,000 (approximately Rs. 41.7 lakh) per token.

“It is critical that you exercise caution and refrain from trading contracts that you are not familiar with or do not fully understand the associated risks. Coinbase will impose strict leverage, position limits and open interest limits on these markets,” his blog added.

The company also noted that there may be cases where some of these unlaunched tokens may never make it to real listings. In this circumstance, he said, “the pre-launch market would not be able to convert to a standard perpetual futures market and the market may need to be suspended and/or delisted.”

Binance, Bybit, Bitget and OKX are other exchanges that reportedly offer similar services for upcoming crypto projects.

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