Coinbase Bridges the Gap Between Traditional Finance and DeFi

TLDR

Table of Contents

Coinbase has launched Verified Pools, KYC-verified liquidity pools that aim to reduce counterparty risk in DeFi
The non-custodial service runs on Base (Coinbase’s Ethereum L2) using Uniswap v4 protocol and is available in select regions
Verified Pools targets both institutional and retail traders who complete Coinbase’s identity verification
Coinbase is also planning to offer 24/7 Bitcoin and Ethereum futures trading and perpetual-style futures
The launch comes as Coinbase benefits from a favorable regulatory environment under the Trump administration

Coinbase, one of the largest cryptocurrency exchanges, announced on Tuesday the launch of Verified Pools. This new service aims to make decentralized finance (DeFi) safer for both retail and institutional users.

Verified Pools are liquidity pools that require users to complete Coinbase’s identity verification process. These pools allow people to trade digital assets while reducing the risks that come with unknown trading partners.

The service runs on Base, Coinbase’s Ethereum Layer 2 network. It uses the Uniswap v4 protocol to handle trades efficiently.

Coinbase has partnered with risk management firm Gauntlet to help secure the pools. This partnership focuses on optimizing how the pools work and maintaining overall liquidity health.

Introducing Coinbase Verified Pools, a trusted way to seamlessly trade onchain.
Dive in. ↓ pic.twitter.com/rddrniaXu8
— Coinbase 🛡️ (@coinbase) March 18, 2025

Users maintain control of their own assets since the pools are non-custodial. This means Coinbase doesn’t hold the funds, giving users more security and control.

The KYC (Know Your Customer) requirement is part of Coinbase’s efforts to stay compliant with regulations. The exchange has recently made moves to limit some services, especially in New York.

Initially, Verified Pools will only be available in certain regions. These include the United States, Singapore, Netherlands, British Virgin Islands, Cayman Islands, and Channel Islands.

Users need a compatible wallet to access the service. Options include Coinbase’s Prime Onchain Wallet, Coinbase Wallet, or any wallet with a Coinbase Verifications credential.

For institutional investors, Verified Pools offers features like concentrated liquidity. This allows liquidity providers to set specific price ranges for their capital, which can increase earning potential.

Onchain trading less intimidating for retail traders

Retail traders can benefit from the simplicity of the system. Coinbase designed the interface to make onchain trading less intimidating for everyday users.

The launch of Verified Pools comes at a good time for Coinbase. The company appears to be in a favorable position under President Donald Trump’s administration.

Trump has expressed plans to make the United States the “crypto capital of the world.” This pro-crypto stance has created a more welcoming environment for companies like Coinbase.

Recently, the U.S. Securities and Exchange Commission (SEC) dropped its lawsuit against Coinbase. This legal victory allows the exchange to operate with fewer restrictions in the country.

Beyond Verified Pools, Coinbase has announced plans to expand its futures trading options. The company will soon offer 24/7 Bitcoin and Ethereum futures trading on its Derivatives platform.

Coinbase also plans to launch perpetual-style futures with extended expiration dates in the U.S. market. These new features will further expand the trading options available to Coinbase users.

Investment firm rated Coinbase as “outperform”

The company’s stock has received positive attention from analysts. Investment firm Bernstein recently rated Coinbase as “outperform” with a price target of $310 per share.

As of March 18, 2025, Coinbase stock was trading at about $182 per share. This represents a slight decrease of 3.3% for that day.

In other news, Coinbase recently announced it will suspend trading of three popular meme coins in New York. Trading of Floki (FLOKI), Turbo (TURBO), and Gigachad (GIGA) will halt on April 14, 2025.

Coinbase describes Verified Pools as “the next step in Coinbase’s commitment to advancing the onchain ecosystem.” The company aims to generate increased adoption of onchain services through this initiative.

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