Coinbase Introduces Secure On-Chain Trading with Verified Pools

Coinbase has launched a new liquidity tool named Verified Pools, aiming to improve the safety and transparency of on-chain trading for both institutional and retail users.

Unveiled on March 18, this feature reduces counterparty risks while keeping the decentralization intact by integrating identity verification with liquidity pools. Decentralized finance allows users to trade assets without intermediaries, but anonymity of fund providers often leads to risky liquidity pools.

To tackle this issue, Verified Pools mandates users to connect their Coinbase Wallet, Prime Onchain Wallet, or third-party wallets via a Coinbase Verifications credential. This adds an extra layer of trust to on-chain transactions by confirming that liquidity providers are verified.

Based on the Uniswap (UNI) v4 protocol, Verified Pools employs "hooks" to enable advanced smart contract functionality, allowing for customizable trading features. The platform has partnered with Gauntlet to optimize the liquidity pool's health.

Transactions are executed on Base, Coinbase's layer-2 network, which helps decrease costs and enhance speed. Currently, Verified Pools is accessible in the U.S., Singapore, the Netherlands, the British Virgin Islands, the Cayman Islands, and the Channel Islands.

For institutions, Verified Pools provides concentrated liquidity and restricted access, ensuring only verified users can supply or trade assets. Institutions can communicate via APIs or Prime Onchain Wallet for a safer trading environment.

Retail traders can also utilize Verified Pools for direct, intermediary-free trading with verified liquidity. Users can execute transactions while retaining full control over their assets by linking a wallet.

The introduction coincides with a resurgence of interest in Coinbase. As reported by Yahoo Finance on March 18, a Bernstein Research analysis predicted that Coinbase's stock could surge by over 60% to $310, attributing this to favorable U.S. regulatory changes. The report referred to Coinbase as the "Amazon of crypto" and highlighted its robust position as a leader in the crypto infrastructure.

Recent pro-crypto initiatives by Trump, such as his executive order to establish a Bitcoin reserve, have also boosted hopes for the industry's future. As Coinbase expands its on-chain ecosystem, it seems poised to capitalize on these developments.