Coinbase Launches New Fund to Boost DeFi Liquidity Across Key Protocols

Coinbase has launched a second iteration of its Stablecoin Bootstrap Fund under its Coinbase Asset Management (CBAM) division to address liquidity gaps in decentralized finance (DeFi). The fund will initially allocate capital to protocols including Aave, Morpho, Kamino, and Jupiter, with the aim of enhancing stablecoin liquidity and supporting both established and early-stage DeFi platforms. This initiative builds on a similar effort launched in 2019, which contributed to USDC’s rise as a key stablecoin in the DeFi ecosystem [1].

The new liquidity injections are designed to improve market depth, particularly for USDC, which now holds $8.9 billion in total value locked (TVL) and processes approximately $2.7 trillion in annual onchain volume across multiple blockchains. The fund’s focus on protocols like Aave and Kamino reflects a recognition of their roles in providing critical liquidity solutions, such as decentralized lending, borrowing, and automated market-making [1].

Coinbase emphasized that the fund will also support pre-launch teams seeking immediate liquidity access, reducing their dependency on slow organic inflows. This approach aligns with the company’s broader vision of strengthening onchain financial infrastructure and fostering deeper, more stable liquidity across DeFi ecosystems [1].

By expanding the reach of USDC through multi-chain deployments on networks including Ethereum, Solana, and Base, Coinbase aims to reinforce the stablecoin’s utility in cross-chain lending, borrowing, and trading. The initiative is seen as part of a larger trend where major crypto firms are investing directly in DeFi infrastructure, rather than merely using it as a tool for speculative gains [1].

The relaunched fund signals a long-term commitment to liquidity provision, a key factor in attracting both institutional and retail participants to the DeFi space. As the sector matures, the ability to maintain consistent liquidity will become increasingly important for protocol sustainability and user adoption [1].

Coinbase’s move also highlights the growing importance of stablecoins in DeFi, where they serve as the primary medium for value transfer and risk mitigation. By backing these protocols with its own capital, Coinbase is reinforcing its role as a key player in shaping the future of onchain finance [1].

Source: [1] New Coinbase Fund Targets DeFi Liquidity Gaps Across Aave, Kamino, and More (https://blockonomi.com/new-coinbase-fund-targets-defi-liquidity-gaps-across-aave-kamino-and-more/)