Coinbase relaunches its Stablecoin Bootstrap Fund to enhance USDC liquidity in DeFi platforms like Aave and Solana-based Kamino.
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Coinbase Relaunches Stablecoin Bootstrap Fund to Enhance USDC Liquidity
In a strategic move to bolster its influence in the decentralized finance (DeFi) space, Coinbase has revived its Stablecoin Bootstrap Fund. This initiative aims to enhance the liquidity of the USDC stablecoin across a variety of popular and emerging DeFi protocols. The fund’s initial deployments will focus on Ethereum-based platforms like Aave and Morpho, as well as Solana-based trading venues such as Kamino and Jupiter.
Strategic Placements in DeFi Protocols
Related: Binance Teams Up with Circle to Expand USDC Stablecoin Use
Coinbase announced on Tuesday that its first fund placements would provide USDC liquidity to these platforms, with a broader goal of scaling the fund over time to distribute liquidity across more protocols and stablecoins. The deployments, managed by Coinbase Asset Management, are intended to ensure that users can access reliable rates across both mature and emerging protocols.
According to a statement by Coinbase, the company is particularly eager to collaborate with pre-launch teams and those seeking to drive stablecoin growth from the outset.
Historical Context and Market Dynamics
Related: USDC Expected to Outpace USDT in Supply Growth by 2024
This initiative marks a return to a strategy first introduced in 2019, which helped USDC become a significant player in the DeFi ecosystem. The original fund provided $1 million each to platforms like Compound and dYdX, facilitating USDC’s growth as a stablecoin in DeFi.
Currently, USDC holds a market capitalization of $65.6 billion, trailing behind Tether (USDT), which dominates the stablecoin market with a capitalization of $164.6 billion, according to CoinGecko data.
Revenue Insights and Future Aspirations
Related: Coinbase Puts an End to USDC Yield for European Users: A Result of MICA Regulations
This development comes as Coinbase reported $1.5 billion in revenue for the second quarter, slightly below industry expectations. Despite a 26% drop in total revenue from the previous quarter, the company saw a 12% increase in stablecoin-related revenue, primarily through USDC, reaching $332 million.
In addition to its financial maneuvers, Coinbase is also working on transforming its Coinbase Wallet into a “super app” known as the Base app. This app aims to integrate social features, apps, chat, payments, and trading, potentially creating a new kind of social network, as highlighted by John Granata, head of product for the Base app.
For more information, you can refer to DeFiLlama’s data on total value locked in DeFi protocols, which currently stands at $165.4 billion, led by Aave and Lido.
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