Major cryptocurrency exchange Binance announced it is about to launch a new futures product tracking crypto asset NEO.
Major cryptocurrency exchange Binance announced that it is about to launch a new futures product tracking crypto asset NEO.
Per the announcement published on Feb. 16, the NEO/USDT futures will be launched on Feb. 17 and traders will be able to select leverage between 1x and 50x. The fees that the exchange imposes on trades of the contract in question are a 2% base initial margin rate, 1% base maintenance margin rate and a 0.5% liquidation fee.
What is NEO?
The Binance information page dedicated to NEO explains that it is an open source platform driven by its community that uses blockchain, smart contracts and digital identities to digitize and automate asset management. The page also mentions that the blockchain first launched in 2016 and is expected to upgrade to the third version of its software (Neo3) this year.
A Binance spokesperson told Cointelegraph that the firm decided to create a NEO-based futures contract after reviewing liquidity on its spot market. Furthermore, the spokesperson also talked about future growth:
“We are looking to add 20 or 30 trading pairs on Binance Futures, and will consider the most liquid 20 to 30 pairs first.”
Meanwhile, NEO price has lost 2.81% of its value over the 24 hours to press time and is currently worth $15.04, after starting the day at $16.67.
NEO price 7-day chart. Source: Coin360
Are futures the speculator’s dream?
Futures contracts often feature particularly high leverage and allows speculation on things that would otherwise be difficult to trade. One example of how futures can enable such activity is the contract launched earlier this month by cryptocurrency derivatives exchange FTX, which allows traders to bet on President Donal Trump’s reelection in 2020.
Just a couple of days later, FTX also announced plans to launch five additional 2020 presidential election-based futures products including a Bernie Sanders (BERNIE) futures trading product, as well as futures on Joe Biden (BIDEN), Elizabeth Warren (WARREN), Pete Buttigieg (PETE) and Mike Bloomberg (BLOOMBERG).