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Coinbase Launches Token Sales Platform for Global Retail Investors

Highlights:

  • Coinbase has introduced algorithmic token distribution for retail users.
  • Retail investors in the U.S. can now access early token sales.
  • Monad will be the first project to launch on Coinbase’s platform.

Crypto exchange Coinbase has announced a new platform that allows token sales to be accessed early, before they are listed on the exchange. The move marks a significant shift and allows retail purchasers to be involved in initial token launches directly with Coinbase.

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The new platform enables registered users to request the tokens during a set time frame, and equitable distribution is managed by an algorithm. It guarantees priority to small buyers and reduces concentration among large investors.

Coinbase Sets a New Standard in Token Sales

Retail users in the United States and the majority of areas worldwide can now access public token sales offered by Coinbase. This marks the initial mass offering of U.S. retail traders since 2018. The mechanism uses an algorithm to allocate tokens equally and eliminates hoarding of assets.

Each token sale lasts one week, and within this time, users can make purchase requests. The algorithm gives preference to small token requests and active long-term supporters. Moreover, early sellers might be given lower allocations in future sales.

Users are not charged any listing or participation fees. Projects make payments to Coinbase according to the received USDC. The token sales will be settled through transactions involving the USDC, the Circle-issued stablecoin.

The initial token offering will take place between November 17 and 22 and will involve Monad, a blockchain project backed by Coinbase Ventures. Monad is planning to spend the funds on the launch of its mainnet.

How the Platform Benefits Issuers and Users

For issuers, the platform results in access to the firm’s global retail base with deep exchange liquidity. It also provides efficient token distribution strategies that are geared towards long-term growth and decentralization.

Projects must provide powerful disclosures to Coinbase. These include tokenomics, team background, and community involvement, where buyers are provided with clear and accurate information before making a decision. Moreover, issuers are required to maintain a six-month lockup on secondary market trading in order to protect investors. During this period, they are not allowed to sell tokens over the counter or in the secondary market without the approval of Coinbase.

Participation is only possible by fully verified users who are in good standing on Coinbase. Every project has to undergo stringent assessments. Additionally, the platform will have a single token sale a month. This enables Coinbase to establish the highest standards and provide comprehensive assistance to every project launch.

Expanding Token Access With Transparent Processes

Coinbase’s move will likely transform the way projects introduce tokens to the market. The model strikes a balance between transparency, reasonable pricing, and inclusion of real community members. Moreover, it removes the first-come, first-served models that leave small buyers behind, facilitating the long-term stability of the projects and sustainable growth.

This announcement follows Coinbase’s recent acquisition of Echo, which is a platform that facilitates community-based investing. Echo allows users to fundraise directly, expanding the growing Coinbase ecosystem.

The firm’s CEO, Brian Armstrong, remarked on the move, noting that the new platform will solve the long-standing issues. He stated that “customers, insiders, and flippers need not be the only beneficiaries of token launchings.”

The assets on this new platform will also appear on the Coinbase listings roadmap. This consequently facilitates an easy route from the launch to the trading of the specific tokens. The announcement spurred a surge in Coinbase stock. The stock closed at $309 and has surged more than 3% in pre-market to $318. The exchange plans to improve the platform over time. Moreover, new features could be added in the future, like limit orders and more allocation to target user bases.

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