Coinbase Unveils Verified Pools Liquidity Solution Targeting Institutions and Retail Users

The feature, which was announced on Mar. 18, lowers counterparty risks while preserving decentralization by combining identity verification with liquidity pools.

Coinbase is launching Verified Pools, a new liquidity solution which aims to make on-chain trading safer and more transparent for both institutional and retail users.

The offering, which combines identity verification with liquidity pools, will lower counterparty risks while still preserving the benefits of decentralization. It is powered by Uniswap v4 and Base, Coinbase's layer-2 network.

Decentralized finance has enabled users to trade assets without the need for middlemen, but because the fund providers are anonymous, liquidity pools have often been risky. To mitigate this, Verified Pools requires users to link their Coinbase Wallet, Prime Onchain Wallet, or third-party wallets using a Coinbase Verifications credential.

This will add an extra layer of trust to on-chain transactions by ensuring that the liquidity providers are verified.

Verified Pools, which is based on the Uniswap (UNI) v4 protocol, uses “hooks” to create advanced smart contract functionality. This will allow for unique trading features that can be customized.

The platform has also partnered with Gauntlet to help optimize the health of the liquidity pool.

Transactions will take place on Base, Coinbase's layer-2 network, which will help to keep costs low and speeds fast.

Currently, Verified Pools is available in the U.S., Singapore, the Netherlands, the British Virgin Islands, the Cayman Islands, and the Channel Islands.

For institutions, Verified Pools will offer concentrated liquidity and controlled access, ensuring that only verified users can supply or trade assets. For a safer trading environment, institutions can communicate through APIs or Prime Onchain Wallet.

Retail traders can use Verified Pools for direct, intermediary-free trading with verified liquidity. Users will be able to transact while linking a wallet to ensure they retain complete control over their assets.

The launch comes at a time of renewed interest in Coinbase. A Bernstein Research analysis, which was cited by Yahoo Finance, predicted that the Coinbase share price could rise by over 60% to reach $310.

The report, which also highlighted the potential of favorable U.S. regulatory changes for Coinbase, described the firm as the “Amazon of crypto.” It highlighted Coinbase's strength as a leader in the crypto infrastructure.

Recently, there has been speculation about Trump’s pro-crypto plans. According to rumors, the former president is planning to launch a new cryptocurrency initiative which could see the U.S. build a Bitcoin reserve.

As Coinbase continues to build out its on-chain ecosystem, it seems well-positioned to capitalize on these developments.