Thread by @0xRishi

My team launched Pre-Launch Markets at Coinbase, available in select non-US jurisdictions to eligible Institutional & Retail users via Coinbase International Exchange & Coinbase Advanced

TLDR: Pre-Launch Markets allow users to trade tokens before they launch

Let’s dive in 🧵👇

Typically, the first time most people can trade a token is when its available for trading via either a spot DEX or CEX, post token generation event (“TGE”) — in other words, once the token exists (i.e. smart contract is deployed), is transferable, and thus is tradable via spot

What if you could trade these assets even earlier?

Introducing Pre-Launch Markets: these markets allow users to “trade” tokens *before they launch*

… before the tokens are transferable and tradable as spot instruments on DEXs or CEXs 😯

In this way, Pre-Launch Markets allow users to participate in price discovery for upcoming projects

These markets are usually priced off an implied Fully Diluted Valuation (FDV)

→ FDV = Total Supply * Price

Public tokenomics reveal the Total Supply at launch, which enables traders to express a view on the opening FDV of the token

→ Price = Implied FDV / Total Supply

Pre-Launch Markets come in various shapes/forms

CEX vs DEX, Derivatives vs Spot

Derivatives: perps (Aevo, Hyperliquid, Drift, Coinbase 🆕) vs expiry futures (Bitmex)

Spot: IOU tokens (many CEXs did this years ago) vs OTC (dominant spot version nowadays; Whales Market, Bybit)

The model we went with at Coinbase is the perp model

AFAIK, Coinbase is now the first and only major CEX to offer pre-launch perps 😎

We stand on the shoulders of those who have innovated/paved the way for these markets

Big shoutout to @juliankoh @aevoxyz & @chameleon_jeff @hyperliquidx who pioneered the pre-launch *perp* model in particular

We are bringing the cutting edge of Defi to Cefi 🫡

So, how do these pre-launch perps actually work underneath the hood?

The main difference is the index price methodology

For pre-launch perps, the index price is an exponential moving average (EMA) of the market’s mark prices (4 hours in our case)

Check out our Help Center for more details on mechanics, risks & considerations 👇

help.coinbase.com/en/internation…

I’m so proud of all the individuals that came together to make this a reality :)

Our first Pre-Launch Market is coming soon — we’ll announce it first @CoinbaseIntExch 👀

For reference, all Pre-Launch Markets will be visible in the Pre-Launch tab at international.coinbase.com