CoinFLEX, a Seychelles-based cryptocurrency derivatives exchange, launched a new product as part of a broader offering dubbed “initial future openings” (IFO). The IFO will provide exposure to token projects that are fundraised via private sales and are traded in the form of illiquid SAFTs prior to launching.
CoinFlex will initate the first IFO with Polkadot. Its mainnet expected to launch by year-end, and its managing foundation recently closing the private sale of 500,000 DOTs, at a $1.2 billion reported valuation. CoinFLEX CEO Mark Lamb said Polkadot’s DOT token market is subsequently “extremely illiquid,” “entirely dark,” and that there is “zero transparency.”
With the Polkadot IFO, CoinFLEX aims to solve these issues as these contracts are “over-margined on the short side,” meaning sellers have to post more margin than the value of Polkadot itself. “This protects the buyers as in any event where Polkadot moons, we’ve already collected extra funds from the seller to protect against them defaulting,” Lamb said. IFOs also allows users to take a position either way, Lamb said. “If you think it’s going to be the next best thing, buy some Polkadot futures. If you think it’s going to fail, short it.”
CoinFlex is also preparing to launch physically delivered futures for Binance’s native token BNB, Tron’s TRX and Bitfinex’s LEO tokens. According to Lamb, these markets are expected to be “very popular as a cash-settled instrument on these illiquid markets would be exceedingly dangerous.”