Coinbase’s ‘Verified Pools’ Reinvent DeFi Safety—Here’s How

Coinbase has launched Verified Pools, a new liquidity solution designed to provide additional security, and transparency in DeFi trading. On March 18, 2025, the feature was announced as a way to lower counterpart risks within decentralization by forcing liquidity providers to verify their identities.

While decentralized finance facilitates trading assets without intermediaries, anonymity has been a challenge given the security risks that it poses to liquidity providers. Users need to link their Coinbase Wallet, Prime Onchain Wallet, or third‐party wallets with Coinbase Verifications credentials. This assures that all stakeholders are vetted, and therefore provides one more layer of confidence to the system.

How Verified Pools Enhance Institutional and Retail Trading

Verified Pools are designed to attract both institutional and retail traders by offering non-custodial liquidity pools that prioritize security. Institutions can benefit from concentrated liquidity and controlled access, while retail traders can execute direct trades without intermediaries.

“Verified Pools offers a carefully selected range of liquidity pools that require the Coinbase Verifications credential,” Coinbase stated. The company highlighted its commitment to expanding on-chain adoption while maintaining strict compliance and security standards.

Introducing Coinbase Verified Pools, a trusted way to seamlessly trade onchain.

Dive in. ↓ pic.twitter.com/rddrniaXu8

— Coinbase 🛡️ (@coinbase) March 18, 2025

The transactions operate on Base, Coinbase’s layer-2 blockchain, designed to enhance transaction speed and lower costs. The platform also integrates sanctions screening and KYC verification, ensuring a safer trading environment for institutional participants.

Technology Behind Verified Pools

Verified Pools are based on the Uniswap v4 protocol, utilizing “hooks” to enable advanced smart contract functionalities. These allow for customizable trading features that enhance liquidity management.

In addition to this, Coinbase has teamed up with Gauntlet, a risk management firm, to help optimize liquidity pool health and efficiency. This guarantees its pools function well and a safe environment for all users.

The feature is currently available in the United States, Singapore, the Netherlands, the British Virgin Islands, the Cayman Islands, and the Channel Islands. In the future, Coinbase intends to increase coverage, add support for more trading pairs, and interact with even more decentralized exchange (DEX) aggregators.

Coinbase Strengthens Its Market Position

The launch of Verified Pools comes at a time of increased interest in Coinbase. According to a Bernstein Research analysis reported by Yahoo Finance on March 18, Coinbase’s stock could see a 60% increase, driven by favorable regulatory changes in the United States.

Furthermore, the industry has been encouraged by the most recent pro-crypto initiatives from Donald Trump, most prominently the advocacy for a Bitcoin reserve. As Coinbase moves forward with the expansion of its on-chain services, it is establishing itself as an institutionally friendly and secure platform to offer DeFi trading.