Coinbase Launches Verified Pools for Secure DeFi Trading
1min read Coinbase has introduced a new service called “Verified Pools,” which are KYC-verified liquidity pools designed to enhance the safety and efficiency of decentralized finance (DeFi) trading. This initiative targets both retail and institutional users, aiming to reduce counterparty risk and create a more secure trading environment. The pools are accessible only to users who have completed Coinbase’s identity verification process, ensuring that all participants are compliant with regulatory standards.
The Verified Pools operate on Coinbase’s Layer 2 network, Base, and utilize the Uniswap v4 protocol for trading functionality. This integration allows for seamless and efficient trading experiences. Additionally, coinbase has partnered with risk management firm Gauntlet to optimize pool configurations and maintain overall pool health, further enhancing the security and stability of these liquidity pools.
A key feature of Verified Pools is their non-custodial nature, which means users retain full control over their assets while trading. This is a significant advantage over traditional centralized exchanges, where users often have to relinquish control of their assets to the exchange. The service is currently available in select regions, including the United States, Singapore, Netherlands, British Virgin Islands, Cayman Islands, and channel Islands.
For institutional clients, Verified Pools offer concentrated liquidity features, allowing liquidity providers to specify price ranges for their capital. This can potentially increase efficiency and earning potential. Institutional users can connect to the pools via API and use Coinbase’s Prime Onchain Wallet for an enhanced trading experience. Retail traders, on the other hand, can access the pools through Coinbase Wallet, providing a simpler way for everyday users to engage with DeFi trading.
The launch of Verified Pools comes at a time when Coinbase appears to be in a favorable regulatory environment. The administration has stated its aim to make the United States a global leader in cryptocurrency. The U.S. Securities and Exchange Commission (SEC) recently dropped its lawsuit against the exchange, allowing Coinbase to operate more freely within the United States. This regulatory shift has enabled Coinbase to expand its service offerings, including the introduction of 24/7 Bitcoin and Ethereum futures trading on the Coinbase Derivatives platform in the coming weeks. Additionally, the company has announced plans to launch perpetual-style futures with extended expiration dates, providing traders with more options.
Ask Aime: What is the impact of Coinbase's Verified Pools on the cryptocurrency market?
Coinbase’s KYC requirements for the pools are part of its broader compliance efforts. This includes scaling back access to some offerings in certain regions. For example, Coinbase recently announced it would halt trading of three popular meme coins in New York, including Floki (FLOKI), Turbo (TURBO), and Gigachad (GIGA), starting April 14, 2025. This move underscores Coinbase’s commitment to regulatory compliance and its efforts to create a safer trading environment for its users.
