Coinbase Introduces ‘Experimental Asset’ Warning for Crypto Traders

Leading cryptocurrency exchange Coinbase has started rolling out a new ‘Experimental’ label to help inform its users about the potential risks of trading less established assets on their platform.

In a March 8 blog post, Coinbase said it intended to increase the number of newly created and relatively unknown tokens released on the platform and felt the label was necessary to ensure transparency and to educate users:

As we expand our asset offerings, we will be bringing on more, often newly created assets or lesser-known tokens that could come with additional trading risks, including higher price swings and increased order cancellations.

Coinbase blog post

What Assets Qualify as ‘Experimental’?

The new ‘Experimental’ label will initially be applied to all newly added assets and to assets with relatively low trading volumes.

Coinbase says these criteria may change over time and assets will move into and out of the ‘Experimental’ category depending on their age, trading volume and other market factors:

Experimental Assets Not Restricted

Assets labelled as ‘Experimental’ will not be restricted in any way: users will still be able to send, receive, buy, sell and hold assets as normal.

However, users will be required to read a warning message and confirm they understand the risks before trading an experimental asset for the first time.

Labelling Useful for New Users

The ‘Experimental’ label follows the announcement that NFTs are coming to Coinbase soon and the success of its Super Bowl ad, both of which likely attracted new users to the platform. 

Given that many of these users will be relatively new to crypto, the new label may help them avoid some uninformed investment decisions.