After six years, Coinbase has launched a new bootstrap fund aimed at providing USDC and EURC liquidity to Aave, Morpho, Kamino, and Jupiter.
Coinbase has announced the launch of the second Bootstrap Stablecoin Fund, marking the return of the strategy to enhance stablecoin liquidity following the success of the first fund in 2019. This new program will be managed by Coinbase Asset Management, focusing on deploying capital across decentralized finance protocols to ensure stable liquidity for DeFi users.
Shan Aggarwal, Coinbase's Business Director, explained that the fund will 'deploy capital into on-chain protocols to ensure sufficient liquidity for their specific use cases, such as liquidity in lending protocols so users can borrow.' Coinbase will primarily provide liquidity using Circle's USDC and the EURC stablecoin, but does not rule out the possibility of expanding to other stablecoins.
This initiative builds on the successful legacy of the 2019 Bootstrap Fund, which played a crucial role in establishing initial USDC liquidity on platforms like Uniswap, Compound, and dYdX. The first fund began with a deployment of $1 million for each Compound and dYdX platform, later expanding an additional $1.1 million for Uniswap and PoolTogether in 2020.
Expanding influence within the DeFi ecosystem
The initial efforts helped USDC become a core stablecoin in the DeFi ecosystem, now widely used across various networks including Ethereum, Base, Solana, Hyperliquid, Sui, and Aptos. Aggarwal emphasized that 'we are at the tipping point of adopting on-chain financial services,' and Coinbase wants to leverage previous successes to 'continue accelerating current interest and adoption.'
The launch of the new fund comes amid Coinbase ramping up its DeFi activities to counteract the decline in spot trading volume and Q2 revenue. Last week, the company announced plans to integrate a decentralized exchange, providing traders access to 'millions' of digital assets previously unavailable on the platform.
This move aligns with Coinbase's long-term ambition to become the 'exchange for everything,' offering trading in tokenized stocks, prediction markets, and early-stage token sales. Combined with the enhanced stablecoin liquidity, this strategy could help Coinbase solidify its central position in the global digital asset trading infrastructure while promoting widespread adoption of decentralized financial services.
