Coinbase Relaunches Stablecoin Fund to Boost DeFi Liquidity and Utility

Coinbase has relaunched its Stablecoin Bootstrap Fund to inject liquidity into decentralized finance (DeFi) protocols and strengthen the utility of its stablecoins, USDC and EURC. This initiative, first introduced in 2019, is now managed by Coinbase Asset Management and aims to expand the adoption of stablecoins across multiple blockchain networks. The fund will begin by allocating capital to protocols such as Aave and Morpho on Ethereum, and Kamino and Jupiter on Solana, with the goal of stabilizing lending pools, improving borrowing efficiency, and enhancing token swaps and liquidity routing [2].

The move is part of a long-term strategy to support DeFi growth across chains and position USDC and EURC as trusted settlement tools. USDC, co-created with Circle Internet Financial, already supports approximately $8.9 billion in total value locked (TVL) and facilitates about $2.7 trillion in on-chain transactions annually across Ethereum, Base, Solana, and Sui. The fund's activities align with Coinbase’s broader transformation into a comprehensive onchain financial platform, including the integration of a decentralized exchange and the rebranding of its wallet to the “Base app” [2].

The relaunched fund follows a similar effort in 2019, during which Coinbase seeded liquidity on platforms like Compound and dYdX, helping USDC gain traction in DeFi. This time, the fund is entering a market where total DeFi TVL is near $160 billion, with Tether (USDT) dominating the stablecoin market by capitalization. By making USDC and EURC more readily available on high-volume protocols, Coinbase aims to increase their utility and encourage broader adoption among both users and developers [2].

The company has also emphasized its openness to early-stage and pre-launch projects that require a liquidity base to attract users. This approach is designed to stimulate DeFi growth at the foundational stage of a project’s lifecycle. Coinbase’s Chief Business Officer, Shan Aggarwal, noted that the fund is part of the company’s broader effort to accelerate onchain adoption and meet the growing demand for decentralized financial services [2].

The timing of the initiative coincides with increased DeFi activity and evolving stablecoin regulations across several jurisdictions. Whether this liquidity injection leads to a significant shift in market dynamics will depend on factors such as developer adoption, ongoing incentives, and the speed at which DeFi protocols integrate USDC and EURC into core markets. By reinforcing the infrastructure of onchain finance, Coinbase aims to enhance the efficiency of trading, reduce slippage, and support the long-term adoption of stablecoins in decentralized markets [2].

Sources:

[2] The Block - [https://www.theblock.co/post/366656/coinbase-stablecoin-liquidity-aave-morpho-kamino-jupiter-new-bootstrap-fund](https://www.theblock.co/post/366656/coinbase-stablecoin-liquidity-aave-morpho-kamino-jupiter-new-bootstrap-fund)