Coinbase’s new KYC verified pools aim to fortify DeFi with secure trading

Coinbase has launched Verified Pools, a Know-Your-Customer (KYC)-verified liquidity pool designed to enhance DeFi adoption while reducing counterparty risks.

This new initiative provides institutional and retail traders with compliant access to on-chain liquidity.

Coinbase CEO Brian Armstrong highlighted that some digital assets require specific regulatory approvals under US law. He noted that Verified Pools will allow users to get verified and trade assets securely on-chain, creating a new standard for compliant DeFi engagement.

Verified Pools

Verified Pools will allow users to connect their wallets—Coinbase Wallet, Prime Onchain Wallet, or third-party wallets—to a Coinbase Verifications credential. This credential acts as a trust badge, verifying users before interacting with liquidity pools.

The pools are built on Base, Coinbase’s layer-2 blockchain, and leverage Uniswap v4 to enhance smart contract functionality.

Additionally, Coinbase has partnered with Gauntlet, a risk management platform, to optimize liquidity pool configurations and ensure overall market health.

Currently, Verified Pools are available to users in the United States, Singapore, the Netherlands, the British Virgin Islands, the Cayman Islands, and the Channel Islands.

Rising institutional interest

The launch of Verified Pools coincides with growing institutional interest in crypto.

A recent Coinbase and EY-Parthenon report found that institutional investors plan to increase their exposure to digital assets in 2025.

The survey, conducted in January, gathered insights from over 350 institutional investors. It revealed that most already hold crypto and intend to allocate at least 5% of their portfolios to digital assets.

The study highlights that institutional investors view crypto as a prime opportunity for risk-adjusted returns over the next three years. While Bitcoin remains dominant, investors are also diversifying into altcoins such as Solana and XRP.

Additionally, the report suggests that interest in digital assets could surge further if spot altcoin ETFs receive approval in the US.

The report noted that institutional sentiment is being driven by expectations of greater regulatory clarity, which could unlock new opportunities, particularly in crypto custody. Still, the evolving regulatory landscape remains one of the industry’s challenges.

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