According to a recent Bloomberg report, CoinFLEX, which is futures exchange focused on the crypto sector, is offering a derivatives payout based on whether Facebook Libra will launch in 2020. Facebook has already pushed the launched forward from the planned Q1 2020 due to regulatory concerns. However, the firm has said that it could launch in the middle of next year once all regulatory issues have been addressed.
About the CoinFLEX Futures Contracts
The Initial Futures Offering is planned for October 24. This will be the third time the exchange is offering derivatives trading for a coin that has not yet been released. The futures will be physically settled in Libra coins if the coin launches by the end of 2020 or on the settlement date. CoinFLEX has set the initial price at 30 cents, which represents a 30 percent chance that Libra will launch by the end of 2020. Besides that, the exchange has set the price cap at $1.1 for each Libra coin to account for changing values of the fiat currencies backing it. If Libra does not launch, investors will lose their investment.
According to an exchange from the official, the price of 30 cents was chosen after discussions with trades and investors. The exchange added that within half an hour of the IFO, investors that did not take part in it would be able to trade the contract freely based on their assessment of the Libra coin progress.
For instance, if an investor thinks there is a 70% chance of the coin being launched within the set time limit, they will pay an equivalent of 70% of the contract. If they are right, they will get the Libra token once the contract’s expiration date arrives. Thus, they will have got the coin at a discount. However, if they are wrong, they will lose their investment.