Restarted Stablecoin Support Fund by Coinbase for Enhancing Decentralized Finance Liquidity
In a strategic move to strengthen the decentralized finance (DeFi) sector, Coinbase has relaunched its Stablecoin Bootstrap Fund, now managed by Coinbase Asset Management (CBAM). The initiative aims to bolster liquidity of stablecoins like USDC and EURC across major DeFi protocols, ensuring sufficient liquidity to support lending, trading, and efficient market access [1][2][4].
The long-term strategic initiative is designed to guarantee ongoing stablecoin availability on-chain, seeding liquidity to improve the efficiency and stability of DeFi markets. By doing so, it helps protocols build strong, liquid marketplaces from early stages, attracting users and encouraging adoption. This rebooted fund is a testament to Coinbase’s commitment to leading on-chain finance development [1][3][4].
The Stablecoin Bootstrap Fund originally launched in 2019, supporting early decentralized exchanges and lending platforms. Since then, it has played a significant role in USDC becoming a dominant stablecoin with around $8.9 billion total value locked in DeFi and over $2.7 trillion annual on-chain transaction volume [1][2][4][5].
The revived fund continues this trajectory by injecting capital into both established and pre-launch projects. Initial placements of the Stablecoin Bootstrap Fund will target Aave, Morpho, Kamino, and Jupiter, with a focus on expanding liquidity across decentralized exchanges beyond the EVM-focused space [1].
Coinbase is also expressing interest in cooperating with pre-launch teams or projects that are still in the early stage of development. The company is focusing on the developing ecosystems beyond Ethereum and Base, integrating projects like Solana-based Kamino and Jupiter [1].
The strategy is to inject sizable amounts of stablecoin liquidity into high-volume protocols for tighter spreads and more predictable rates. Stablecoins such as USDC are increasingly being used on many networks in payments, collateral, and on-chain settlements. Coinbase continues to push for broader adoption of tokenized real-world assets [1].
As the future of finance is seen as entirely on-chain, Coinbase is building a financial infrastructure where asset transfers, lending, trading, and settlement happen natively on decentralized networks. Seeding stablecoins into these ecosystems from day one could help new projects skip the "cold start" problem and enter the market with competitive liquidity [1].
[1] Coinbase Blog Post: [https://blog.coinbase.com/coinbase-introduces-the-stablecoin-bootstrap-fund-to-boost-liquidity-across-decentralized-finance-protocols-36a0a926e36c] [2] CoinDesk Article: [https://www.coindesk.com/business/2022/03/17/coinbase-to-relaunch-stablecoin-bootstrap-fund-to-boost-decentralized-finance-liquidity/] [3] Decrypt Article: [https://decrypt.co/96529/coinbase-relaunches-stablecoin-bootstrap-fund-decentralized-finance] [4] The Block Article: [https://www.theblockcrypto.com/linked/118347/coinbase-relaunches-stablecoin-bootstrap-fund-to-boost-decentralized-finance-liquidity] [5] Cointelegraph Article: [https://cointelegraph.com/news/coinbase-relaunches-stablecoin-bootstrap-fund-to-boost-decentralized-finance-liquidity]
- Coinbase is focusing on injecting liquidity into DeFi markets to enhance efficiency and stability, primarily supporting stablecoins like USDC and EURC.
- This initiative by Coinbase Asset Management (CBAM) aims to guarantee stablecoin availability on-chain, targeting major DeFi protocols for lending, trading, and efficient market access.
- The revived Stablecoin Bootstrap Fund started in 2019, supporting early decentralized exchanges and lending platforms, and played a crucial role in USDC's growth as a dominant stablecoin.
- The fund now targets both established projects like Aave and pre-launch teams across various blockchains beyond Ethereum, such as Solana-based Kamino and Jupiter.
- Coinbase is interested in expanding liquidity across decentralized exchanges and beyond the EVM-focused space to improve trading and ensure predictable rates.
- The adoption of stablecoins on multiple networks for payments, collateral, and on-chain settlements is being pushed by Coinbase, leading to broader use of tokenized real-world assets.
- Breaking barriers in the DeFi sector, Coinbase is keen on building a financial infrastructure where asset transfers, lending, trading, and settlements happen natively on decentralized networks.
- Seeding stablecoins into developing ecosystems from the beginning is crucial for new projects, as it can help them enter the market with competitive liquidity and skimp the "cold start" problem.
