Korbit Launches 'Price Protection' Feature to Enhance Trading Safety and Stability

Korbit has unveiled its innovative "Price Protection" feature, aiming to safeguard users from executing trades at unfavorable prices during order matching. This strategic addition marks a significant move towards enhancing user protection and market reliability within the digital asset trading landscape.

What Is the Price Protection Feature?

The Price Protection feature is designed to mitigate risks posed by adverse trading conditions, such as sharp price fluctuations, wide bid-ask spreads, or low market liquidity. By preventing trades from being executed at disadvantageous price points, the feature aligns with similar user protection measures implemented by leading global cryptocurrency exchanges like Binance.

At its core, the feature enables users to set a predefined range within which an order can be executed. For instance, if a user opts for a price protection range of ±2%, the system will ensure that the trade executes only within ±2% of the mid-market price — a figure calculated as the average of the best bid and ask prices. Should the trade volume within this range be exhausted, any remaining quantity of the order is automatically canceled, avoiding execution at extreme or unintended pricing levels.

How Price Protection Benefits Users

Korbit anticipates that this functionality will provide users with a more stable and reliable trading environment by countering the risks associated with erratic price points. Key advantages include:

• Preventing Unintended Price Executions: Trades are safeguarded against sudden price spikes or drops, ensuring users avoid costly execution mistakes.
• Reduction of Divergent Pricing Risks: Wide discrepancies between bid-ask spreads are mitigated, resulting in fairer trades.
• Enhanced Control over Trade Orders: Users gain greater control over their transactions by establishing personalized price ranges.

Initially available for API-based orders, Korbit plans to extend the feature to all users, ensuring broader access to this enhanced trading tool in the near future.

Significance for Market Stability

Beyond individual user benefits, the Price Protection feature plays a pivotal role in advancing market stability and fostering healthier trading practices. Lee Jung-woo, Chief Technology Officer (CTO) of Korbit, emphasized its critical importance, stating, "Price Protection is more than a convenience feature; it plays a critical role in enhancing both user protection and market stability. It underscores our commitment to ensuring a safe trading environment and fostering healthy market practices."

Aligning with Industry Trends

Korbit's introduction of this feature reflects a broader trend within the digital asset trading industry: prioritizing user-centric solutions that increase trust and operational integrity. As the cryptocurrency market evolves, exchanges are adopting sophisticated tools and technologies to address common trading challenges, bolster consumer confidence, and reduce systemic risks.

By implementing the Price Protection feature, Korbit demonstrates its commitment to leading this charge and maintaining its status as a forward-thinking platform that prioritizes user security and satisfaction.