Coinbase Launches Verified Pools, Expanding On-Chain Trading to Institutional Investors

Today, Coinbase is launching Verified Pools, a new product that brings the benefits of on-chain trading to institutional investors.

Coinbase has launched "Verified Pools" for institutions and retail investors to engage in "onchain" crypto trading with higher levels of security, transparency, and freedom of choice compared to traditional structured liquidity pools.

Coinbase Unveils ‘Verified Pools’ Merging Institutional and Retail Onchain Liquidity

The move comes in response to the growing demand from institutional investors and banks for a safe and compliant way to participate in onchain markets.

"They require a place to trade onchain, and Verified Pools provide this safety as identity verification meets the transparency of smart contracts," Coinbase explained in a blog post on Thursday.

"This makes the whole process feel more natural and smooth, minimizing counterparty risk and maximizing confidence in the system."

Currently, there are nine Verified Pools active in the following regions: U.S., Singapore, Netherlands, British Virgin Islands, Cayman Islands, and Channel Islands.

Traders can access these pools by connecting a Prime Onchain Wallet, Coinbase Wallet, or external third-party wallets via the Coinbase Verifications credential, which serves as a trusted badge in the onchain universe.

"Each institution or bank can be easily identified and verified through Verifications, a trusted credential in the onchain universe. This allows for seamless integration and a smooth transition for institutions to move into the onchain ecosystem," the exchange explained further.

Institutions Have More Control Over Onchain Trading

The protocol used for building Verified Pools is Uniswapv4, a highly utilized decentralized exchange (DEX) protocol that grants the flexibility to construct a custom contract and a smart contract to dictate the terms of an exchange.

Coinbase has also partnered with a risk modelling company, Gauntlet, to help ensure that these pools function as they are intended.

This entire process is taking place on Base, Coinbase’s layer-2 network that facilitates faster transaction speeds and lower fees.

"This initiative grants institutions more control over their onchain trading activities and capital. They can set price ranges for their supply liquidity, leading to increased capital efficiency," Coinbase explained.

"The pools exist only in an earns-certified environment for trading by eligible users. Pools are non-custodial, meaning that institutions retain full ownership of the coins and tokens while trading."

Moreover, these pools are designed to be easily accessed by a broad range of users.

"We know that onchain liquidity pools give funds to the average trader, who may distrust or find them confusing or dangerous. We're making onchain trade as easy and secure as possible for everyone out there," the exchange stated.

"Our aim is to make it simple for users to engage in onchain trading without any hitches. They can access the verified pools and trade with Coinbase Wallet-verified liquidity with just a few clicks."

This enables users to exchange directly within the pool without the need for any intermediaries, minimizing unnecessary complexity and facilitating faster transaction times.

"All participants can be authenticated, meaning that transactions are completely depersonalized and frictionless. On top of that, everyone can always have ultimate control over their assets—their funds are safe."

Overall, Coinbase is aiming to redefine the standards for onchain trading in terms of security, user-friendliness, and accessibility.

As the rollout of Verified Pools continues, an increasing number of traders will have the opportunity to benefit from onchain crypto trading that is designed to be secure, efficient, and transparent.

By forging a bridge between institutional finance and onchain markets, Verified Pools are opening up new possibilities for high-volume traders and delivering an onchain experience that is tailored to the needs of institutions.

Institutions can readily connect via API to provide liquidity or utilize Prime Onchain Wallet for an enhanced onchain trading experience.