Coinbase Global Inc. (NASDAQ:COIN) on Tuesday launched Verified Pools, a new initiative designed to improve transparency and security in decentralized finance (DeFi) liquidity pools.
The move comes amid growing scrutiny of risks associated with DeFi platforms, particularly regarding opaque liquidity sources and counterparty risks.
The product, available to users in the U.S., Singapore, the Netherlands, British Virgin Islands, Cayman Islands and Channel Islands, introduces a verification system that integrates identity checks through Coinbase Verifications.
The system aims to reduce the uncertainty associated with who is providing liquidity in these pools, a common issue within DeFi ecosystems.
Verified Pools uses the Uniswap v4 protocol and operates on Coinbase’s Base layer-2 network, which focuses on reducing transaction fees and improving transaction speeds.
Coinbase has also partnered with risk modeling firm Gauntlet to help optimize the liquidity pool configurations.
For institutional participants, Verified Pools offers features such as concentrated liquidity strategies, restricted access via verified credentials, and non-custodial asset management through Coinbase’s Prime Onchain Wallet. Institutions can also connect via API for liquidity provisioning.
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Retail users are provided with simplified access to liquidity pools through Coinbase Wallet.
The system allows direct interaction with pools while offering verified liquidity sources aimed at reducing potential risks.
Users maintain full control over their assets while participating in onchain trading.
"Verified Pools is the next step in Coinbase's commitment to advancing the onchain ecosystem," the company stated, indicating plans to expand, though no specific schedule has been set.
Despite the new offering, Verified Pools enters a competitive market where DeFi participants already have access to a variety of liquidity solutions on decentralized exchanges.
Coinbase's approach highlights the increasing trend of incorporating identity verification into DeFi protocols, as regulators and users push for higher security and transparency standards.
Coinbase said the new product is part of its broader strategy to expand onchain adoption, but stopped short of offering specifics on future geographic expansions or additional features.
The company has stated that Verified Pools will continue to evolve, with further developments expected depending on user demand and regulatory requirements across different markets.
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