Coinbase Launches Stablecoin Fund to Boost DeFi Liquidity Amid $40.7B Active Loans

Coinbase has launched a second Stablecoin Bootstrap Fund to provide liquidity for decentralized finance (DeFi) protocols through USDC, a stablecoin pegged to the U.S. dollar. The initiative, announced on Aug. 12, aims to support protocols across multiple blockchains, including Aave, Morpho, Kamino, and Jupiter. The fund reflects Coinbase’s ongoing commitment to fostering stablecoin adoption in the DeFi ecosystem, building upon the success of its original 2019 Bootstrap Fund, which contributed to the early growth of USDC in platforms like Uniswap, Compound, and dYdX [1].

The timing of the new fund is strategic, aligning with a broader trend of increasing on-chain financial activity. USDC has become the dominant stablecoin in DeFi, with approximately $8.9 billion in total value locked (TVL) and over $2.7 trillion in annual on-chain transaction volume. A Coinbase spokesperson highlighted that the current environment presents a unique opportunity to expand the use of stablecoins in emerging and established protocols. The spokesperson noted that the record $40.7 billion in active DeFi loans underscores the growing demand for liquidity solutions [1].

The fund is expected to deepen the availability of stablecoin liquidity across the on-chain ecosystem, enabling users to access more favorable borrowing rates and encouraging further on-chain activity. By distributing liquidity among multiple protocols, the initiative could reduce USDC borrowing rates on key platforms and incentivize greater participation. Coinbase also expressed interest in working with pre-launch projects to drive early-stage stablecoin adoption. The exchange emphasized that the fund is designed to support innovation across the DeFi landscape, regardless of a project’s size [1].

Long-term, Coinbase plans to scale the fund and expand its reach beyond the initial four protocols to include additional stablecoins and platforms. The move is seen as a continuation of the company’s broader strategy to facilitate on-chain financial services. The spokesperson concluded that the timing is opportune for building new infrastructure in DeFi and that the Stablecoin Bootstrap Fund is positioned to provide liquidity where it can have the most impact [1].

The initiative reflects a broader industry shift toward leveraging stablecoins to bridge traditional finance and DeFi. By injecting capital into key protocols, Coinbase aims to support the infrastructure that enables greater accessibility and efficiency in on-chain financial services. The launch of the fund is a strategic step in the evolution of DeFi liquidity, particularly as stablecoins continue to play a central role in decentralized markets [1].

Source: [1] Coinbase facilitates DeFi funding via USDC amid $40.7B active loan record (https://cryptoslate.com/coinbase-facilitates-defi-funding-via-usdc-amid-40-7-billion-active-loan-record/)