- Coinbase announces investments to bolster the Ethereum ecosystem
- Investment comes from the exchange’s USDC Bootstrap Fund
Coinbase announced two significant investments to bolster the Ethereum ecosystem. In specific, these two investments will help promote the growth of decentralized finance (DeFi) protocols.
These investments come from Coinbase’s USDC Bootstrap Fund, a $2M fund that invests into smart contract protocols to help bolster USDC (Coinbase’s stablecoin) and decentralized finance adoption. Coinbase has invested $1.1M in this round of investments.
The exchange invested $1 million is USDC coins towards Uniswap, an automated exchange between Ethereum and ERC-20 tokens on the platform. The investment will go towards the platform’s liquidity pool.
Uniswap is emerging as one of the most liquid exchanges on Ethereum. Their constant market maker model makes it easy to launch a liquid exchange for any token, and is increasingly becoming critical infrastructure for tokens and applications that need liquidity.– Coinbase
Coinbase chose this platform as it is a critical part of the Ethereum ecosystem. Furthermore, the platform underwent significant growth in just one year. The platform grew from $0M to 31M in liquidity, making Uniswap one of the fasted growing exchanges on the Ethereum platform.
Coinbase has also invested in PoolTogether. In short, PoolTogether merges to the concept of interest savings and luck. Users deposit funds that gain interest over time. These funds however are all paid to a random winner
The cryptocurrency giant provided $100K in USDC as a sponsor and increasing the interest rate for USDC deposits.
What is Decentralized Finance?
The Ethereum platform is a decentralized smart contract platform (what are smart contracts). This technology allows the platform to adopt a variety of potential use cases.
In short, decentralized finance refers to financial contracts on the smart contract blockchain. Decentralized finance includes smart contracts, protocols, DApps, and any sort of financial software on the blockchain.
What are the benefits?
Decentralized finance offers several advantages over traditional finance.
DeFi allows for financial activity to take place without a centralized party controlling it. This puts the trust in the financial system back to the people, rather than central authorities. As a result, it helps educate the public on financial responsibility as they are fully responsible for their digital assets.
Furthermore, DeFi enables blockchain banking. Blockchain banking allows users to bank on the decentralized and immutable blockchain. One of the many benefits includes the ability to transfer money across borders instantly without huge fees. Blockchain banking has true potential and is only possible with the continual development of DeFi protocols
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