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Coinbase Relaunches Stablecoin Bootstrap Fund to Supercharge DeFi Liquidity
In a move aimed at boosting decentralized finance (DeFi) liquidity and improving market conditions, Coinbase has relaunched its Stablecoin Bootstrap Fund. The fund’s primary goal is to increase the availability of stablecoins in decentralized lending and borrowing protocols.
The initiative will be managed by Coinbase Asset Management (CBAM) and initially involve deploying USDC and EURC on Aave, Morpho, Kamino, and Jupiter. This reboot follows a similar endeavor from 2019 when the company provided initial liquidity for USDC in pools on Uniswap, Compound, and dYdX.
During that period, USDC gained traction in the on-chain market. Currently, it holds around $8.9 billion in total value locked and reports an annual volume of nearly $2.7 trillion across multiple blockchains.
The newly relaunched fund will focus on reinforcing loan pool stability and maintaining competitive interest rates for borrowers and lenders on Aave, a decentralized lending protocol. Additionally, Coinbase is targeting Morpho to enhance peer-to-peer market efficiency by reducing slippage and optimizing the balance between passive and active liquidity. The company is also extending support to Kamino and Jupiter, with the aim of strengthening EURC pairs and improving currency conversions, thus enabling euro-denominated operations within the on-chain environment.
In a gradual approach, Coinbase will implement placements, evaluating each protocol’s performance before increasing investments. Although the fund’s total size and specific deployment amounts have not been disclosed, this measured approach ensures that liquidity is distributed proportionally to real demand, preventing any single market from becoming overly saturated.
The relaunch of the Stablecoin Bootstrap Fund comes as DeFi recovers from a downturn in recent months. Presently, the overall value locked across decentralized protocols has stabilized around $200 billion, demonstrating an increase after a period of stagnation but still below its peak in 2021.
As Coinbase seeks to boost liquidity and optimize market conditions for users, this move aims to simplify cross-border transactions, streamline flows requiring currency diversification, and provide a more stable environment for both retail and institutional investors across various on-chain networks.
Source: crypto-economy.com
