Coinbase pumps 1.1 million USDC in Uniswap and PoolTogether
- Uniswap got 1 million USDC, while PoolTogether got the remaining 100,000 USDC.
- The funds are meant to facilitate the growth of both DeFi protocols.
- These investments are part of Coinbase's wider goal to increase USDC adoption.
Coinbase, a leading US-based crypto exchange has bought into Uniswap and PoolTogether. The exchange unveiled this news through an official blog post on April 1. Per the publication, the investment is worth £885,247, and is meant to boost the growth of both decentralized finance (DeFi) protocols.
According to the blog post, Coinbase invested these funds through its USDC Bootstrap fund, which went live in September last year. The fund injected 1,000,000 USDC to Uniswap’s USDC/ETH pool. It then pumped another 100,000 USDC to PoolTogether as a pool sponsor.
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This news comes as Coinbase continues working on encouraging growth in USDC and DeFi.
Sharing the vision for its Bootstrap fund, Coinbase said,
“With USDC, we hope to provide critical infrastructure that will enable DeFi to grow and increasingly compete with existing financial products.”
Improving Uniswap’s app
Uniswap works by creating matched pools where an ERC-20 token is paired with an equal amount in value of ETH. In so doing, the protocol helps users trade tokens for ETH and ETH for other tokens without touching the ETH involved.
Coinbase’s investment in Uniswap will help improve the function of the app. This is because the app functions better with increased liquidity.
Explaining this concept, Uniswap’s founder, Hayden Adams said,
“It provides a significant improvement to prices on that pool. The pool can support larger trade sizes and more volume,”
He added that compared to large pools, small pools tend to get out of line easily with the broader market. As such, large pools are integrated by other apps. With this in mind, Adams noted that Uniswap will now be in a position to execute a larger percentage of price-sensitive trades as compared to other liquidity sources.
Increasing PoolTogether’s USDC daily prize
Unlike Uniswap, PoolTogether is a savings game built on Compound. It works as a lossless lottery wherein users deposit funds, which earn interest. One random depositor then wins all the interest earned by everyone’s crypto on either a daily or weekly basis, depending on the token.
Coinbase’s investment will help back PoolTogether’s Sponsor Pool, in which deposited funds don’t stand a chance to win the prize. This sweetens the deal for other depositors as they stand a chance to reap big profits should the stars align in their favor.
Do you think Coinbase’s investment in Uniswap and PoolTogether will help boost USDC use? Share your thoughts in the comments below.