After six years, Coinbase launches a new bootstrap fund to provide liquidity for USDC and EURC on Aave, Morpho, Kamino, and Jupiter.
Coinbase has announced the launch of its second Stablecoin Bootstrap Fund, marking the return of its stablecoin liquidity enhancement strategy following the success of the first fund in 2019. The new program will be managed by Coinbase Asset Management, focusing on deploying capital across decentralized financial protocols to ensure stable liquidity for DeFi users.
Shan Aggarwal, Coinbase's Business Director, explained that the fund will "deploy capital into onchain protocols to ensure sufficient liquidity for their specific use cases, such as liquidity in lending protocols for users to borrow." Coinbase will primarily provide liquidity through Circle's USDC and EURC stablecoin, but does not rule out the possibility of expanding to other stablecoins.
This initiative builds on the successful legacy of the 2019 Bootstrap Fund, which played a crucial role in establishing initial USDC liquidity on platforms like Uniswap, Compound, and dYdX. The first fund started by deploying 1 million USD to each of Compound and dYdX platforms, then expanded with an additional 1.1 million USD to Uniswap and PoolTogether in 2020.
Expanding Influence in the DeFi Ecosystem
The initial efforts helped USDC become a core stablecoin in the DeFi ecosystem, now widely used across multiple networks including Ethereum, Base, Solana, Hyperliquid, Sui, and Aptos. Aggarwal emphasized that "we are at the explosion point of onchain financial service adoption," and Coinbase wants to leverage its previous success to "continue accelerating current interest and adoption."
The launch of the new fund comes as Coinbase is intensifying its DeFi activities to counter the decline in spot trading volume and Q2 revenue. Last week, the company announced plans to integrate a decentralized exchange, providing traders access to "millions" of digital assets previously unavailable on the platform.
This move aligns with Coinbase's long-term ambition to become an "everything exchange," offering tokenized stock trading, prediction markets, and early-stage token sales. Combined with stablecoin liquidity enhancement, this strategy could help Coinbase consolidate its central position in global digital asset trading infrastructure while promoting widespread adoption of decentralized financial services.
