The fund's deployment is timely, as the DeFi sector is experiencing growth, with nearly $200 billion in assets held across various protocols.

Coinbase has revived its Stablecoin Bootstrap Fund to enhance liquidity for USDC and EURC across major decentralized finance (DeFi) platforms.

Although the size of the fund has not been disclosed, Coinbase plans to test capital placements across multiple networks before scaling up.

This initiative is expected to lower the borrowing rate for USDC in decentralized money markets, making it more appealing for on-chain leverage.

Coinbase's broader vision is to create an entirely onchain financial infrastructure, where transactions, lending, and trading occur on decentralized networks.

The initiative will support protocols across various blockchains, starting with Aave, Morpho, Kamino, and Jupiter, while inviting other protocols to seek liquidity.

A Coinbase spokesperson emphasized the significance of the launch given current market conditions and the record $40.7 billion in active DeFi loans.

The fund will be managed by Coinbase's Asset Management team, ensuring sustainable growth without oversaturating any single protocol.

Initial funding will support Aave to enhance lending pool stability and Morpho to optimize peer-to-peer lending markets.

Coinbase plans to scale the fund over time, adding liquidity to additional protocols and stablecoins beyond the initial four recipients.

USDC has emerged as the leading stablecoin in DeFi, with an estimated $8.9 billion in total value locked and $2.7 trillion in annual on-chain transaction volume.

Coinbase's strategy includes injecting substantial stablecoin liquidity into high-volume DeFi protocols to ensure tighter spreads and more predictable trading rates for users.