Coinbase has launched Verified Pools, a set of liquidity pools designed to enhance onchain trading transparency and security, available exclusively to verified users in select regions. This development comes as Coinbase saw its assets under management grow to $420 billion, and its Q4 earnings surge.
The new feature, unveiled on March 18, allows institutions and retail traders to participate in liquidity pools while reducing counterparty risk. Verified Pools integrate Coinbase Verifications, a Know-Your-Customer credential, ensuring that only vetted participants can provide or access liquidity. Users can connect through Prime Onchain Wallet, Coinbase Wallet, or other wallets linked to Coinbase Verifications.
Coinbase said in its announcement:
By seamlessly integrating identity verification with smart contract transparency, Verified Pools reduces counterparty risks while upholding the openness and efficiency of onchain markets
Verified Pools operate on Base, Coinbase’s Ethereum Layer-2, leveraging Uniswap v4 for decentralized liquidity and Gauntlet’s risk modeling for enhanced pool optimization. This setup aims to improve capital efficiency, mitigate risks, and increase institutional adoption in onchain markets.
Currently, the pools are accessible in the U.S., Singapore, the Netherlands, the British Virgin Islands, the Cayman Islands, and the Channel Islands. Participants can supply liquidity while maintaining non-custodial control over their assets.
Benefits of Coinbase Verified Pools
For institutions, Verified Pools provide a secure and efficient way to participate in onchain trading. One key advantage is concentrated liquidity, which allows liquidity providers to specify price ranges, optimizing capital efficiency and ensuring tighter spreads.
Another major feature is controlled access, as only verified users can interact with these liquidity pools. By limiting participation to authenticated entities, Verified Pools mitigate counterparty risks, ensuring that institutional traders operate in a more transparent and compliant environment.
Additionally, Verified Pools offer API integration, enabling institutions to provide liquidity programmatically. This allows for automated trading strategies and seamless integration with institutional trading infrastructure. Traders can also connect via Prime Onchain Wallet, a dedicated institutional-grade solution designed for secure and high-frequency onchain trading.
For retail traders, Verified Pools provide a straightforward and secure way to trade onchain. Users can access verified liquidity pools directly without the need for intermediaries, ensuring a transparent trading environment. More importantly, traders retain full custody of their funds, reinforcing the principle of self-sovereignty in decentralized finance.
