Coinbase Introduces KYC-Integrated Verification System for DeFi 

Coinbase Verified Pools is currently available to users in the US, Singapore, Netherlands, British Virgin Islands, Cayman Islands, and the Channel Islands, as stated in a March 18, 2025 press release.

In a post on X, Coinbase CEO Brian Armstrong explained that this initiative aims to bring more assets to the chain. He pointed out market limitations, noting that under US law, some onchain assets are accessible to traders with specific verifications. With Verified Pools, traders can access different asset classes onchain with easier verification.

Armstrong believes we are in the early stages of updating the financial system, hinting at increased adoption and more crypto products in the future.

Verified Pools utilizes Coinbase's KYC-integrated verification system to enhance onchain liquidity. By combining identity verification with smart contract transparency, it helps reduce counterparty risks while preserving the openness and efficiency of onchain markets.

This solution provides financial institutions with a more accessible way to interact with crypto. Coinbase Verified Pools is built on the Uniswap v4 protocol and uses hooks—functions designed to enable smart contract functionality. It operates on Base, Coinbase’s Layer 2 network, which focuses on faster transaction speeds and reduced costs.

In addition, Coinbase has partnered with Gauntlet, a provider of risk analysis and economic optimization solutions, to improve the setup of liquidity pools and enhance their overall stability.

The Role of Coinbase in DeFi 

While Coinbase is primarily known as a centralized cryptocurrency exchange, it has been actively expanding its presence in the DeFi space to meet the growing demand for decentralized financial services.

As part of its DeFi efforts, the company launched Base in August 2024, an Ethereum Layer 2 scaling solution. According to DeFiLlama, Base is now among the top 10 blockchains, with more than $3 billion in Total Value Locked (TVL) across DeFi apps.

Leading dApps operating on the blockchain include Aerodrome, Morpho Blue, and Uhniswap.

It’s important to note that Coinbase's involvement in DeFi remains within a regulated and curated framework (e.g., requiring verification for Verified Pools), which contrasts with the fully permissionless nature of many DeFi platforms. This hybrid approach allows Coinbase to maintain security and compliance while participating in the DeFi ecosystem.