Coinbase has introduced Verified Pools, a new liquidity solution designed to enhance security and transparency in on-chain trading. Announced on March 18, this feature aims to reduce counterparty risks while maintaining decentralization by integrating identity verification with liquidity pools. Decentralized finance (DeFi) has revolutionized asset trading without intermediaries, but anonymous liquidity providers have historically posed risks. Verified Pools addresses this issue by requiring users to verify their identity while participating in liquidity pools.

How Verified Pools Works

Enhancing security and liquidity transparency

• Users must link their Coinbase Wallet, Prime Onchain Wallet, or third-party wallets through a Coinbase Verifications credential.
• This ensures that liquidity providers are verified, making transactions more trustworthy.
• Built on Uniswap v4, Verified Pools leverages "hooks" for customizable smart contract functionality.
• The platform collaborates with Gauntlet to optimize liquidity health and trading efficiency.
• Transactions occur on Base, Coinbase’s layer-2 network, reducing fees and increasing speed.

Geographic availability: Verified Pools is currently accessible in the U.S., Singapore, the Netherlands, the British Virgin Islands, the Cayman Islands, and the Channel Islands.

Benefits for Institutional and Retail Traders

Institutional-grade security and liquidity control

For institutions, Verified Pools provides:

• Concentrated liquidity, ensuring that only verified users can supply or trade assets.
• API integrations and Prime Onchain Wallet connectivity for seamless institutional trading.
• Improved security through identity verification, reducing exposure to malicious actors.

For retail traders, the feature enables:

• Intermediary-free trading with verified liquidity, ensuring a safer environment.
• Full control over assets while maintaining decentralization.
• Trustworthy counterparties, making DeFi trading more accessible and secure.

Coinbase’s Strategic Expansion and Market Impact

Riding the wave of crypto adoption

• Coinbase's stock price is expected to surge over 60%, with analysts projecting a target of $310 due to favorable U.S. regulatory developments.
• A recent Bernstein Research report labeled Coinbase the "Amazon of crypto," highlighting its dominance in the crypto infrastructure space.
• Pro-crypto policies, including Trump’s executive order for a Bitcoin reserve, have fueled optimism about the industry's growth.

As Coinbase expands its on-chain ecosystem, Verified Pools positions the exchange as a leader in secure, scalable DeFi solutions.

Final Thoughts: A Major Step for On-Chain Finance

With Verified Pools, Coinbase is bridging the gap between decentralization and security. By requiring identity verification for liquidity providers, the feature enhances trust without compromising DeFi’s core principles.

As adoption grows, Verified Pools could set a new standard for safe on-chain trading, paving the way for wider institutional participation in DeFi markets.