Coinbase to boost stablecoin liquidity on Aave, Morpho, Kamino, and Jupiter via new Bootstrap Fund
Crypto exchange Coinbase has launched a second Stablecoin Bootstrap Fund after nearly six years since its first such fund in 2019 to increase stablecoin liquidity across decentralized finance (DeFi) protocols, with initial placements on Aave, Morpho, Kamino, and Jupiter.
Coinbase Asset Management will manage the liquidity program, which aims to expand stablecoin access and ensure reliable rates across DeFi protocols.
"It means deploying capital in onchain protocols to ensure there is sufficient liquidity for their unique use cases (e.g., liquidity in a lending protocol for users to borrow from)," Shan Aggarwal, chief business officer at Coinbase, told The Block.
Aggarwal declined to disclose the size of the fund, but said the fund will provide liquidity in Circle's USDC as well as its EURC stablecoins, but may extend to other stablecoins over time.
The initiative revives Coinbase’s 2019 Bootstrap Fund, which helped seed USDC liquidity on protocols like Uniswap, Compound, and dYdX. The first fund initially deployed $1 million each to lending platform Compound and trading protocol dYdX, and later expanded in 2020 to back Uniswap and PoolTogether with $1.1 million. These early placements helped establish USDC as a core stablecoin in DeFi.
USDC now powers ecosystems across Ethereum, Base, Solana, Hyperliquid, Sui, and Aptos, among others. Coinbase said the new fund is part of its broader push to bring more assets onchain and accelerate stablecoin adoption.
When asked why launch the second fund now, Aggarwal said, "We’re at an inflection in adoption of onchain financial services. We saw how successful the first fund was in helping drive the initial wave of onchain stablecoin liquidity, and saw an opportunity to leverage Coinbase’s resources to further accelerate the interest and adoption that we’re seeing today."
Coinbase, one of the largest centralized crypto exchanges in the U.S., has been making a stronger push into DeFi. Last week, the company announced plans to integrate a decentralized exchange, giving traders access to "millions" of digital assets previously unavailable on its platform. The move follows a reported decline in Coinbase’s spot trading volumes and revenue for the second quarter.
Coinbase has also said it aims to position itself as an "everything exchange," offering trading in tokenized stocks, prediction markets, and early-stage token sales.
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