Announced Tuesday, the US cryptocurrency exchange is investing 1 million USDC each in lending protocols Compound and dYdX. Called the "USDC Bootstrap Fund," Coinbase says the new fund will support developers by "Investing USDC directly in the protocol."
USDC is a dollar-pegged stablecoin launched last year by Coinbase in partnership with crypto finance startup Circle.
According to data from Etherscan, there are currently $443 million USDC tokens in circulation.
The move differs in important ways from the typical investments made by Coinbase Ventures, according to Coinbase product manager Nemil Dalal.
Doing so is mutually beneficial for both Coinbase and the participating DeFi platforms, according to dYdX Head of Operations Zhuoxun Yin.
Compound CEO Robert Leshner added that the USDC Bootstrap Fund can also be seen as "The starting point for the legitimization of open finance."
Other DeFi applications that want to integrate USDC for the first time or increase the asset's liquidity on their platforms are encouraged to apply for the USDC Bootstrap Fund through an online form.
Yin said the Coinbase due diligence team did a thorough investigation of the dYdX code before committing to the $1 million USDC investment.
That said, there is some immediate upside for Coinbase in investing USDC tokens on both Compound and dYdX: returns are promised to all users of these DeFi applications - including Coinbase.
The current interest rates on USDC accounts are 5.03 percent and 5.35 percent on Compound and dYdX, respectively.
Coinbase to Invest $2 Million USDC in DeFis Compound and dYdX
gepubliceerd op Sep 10, 2019
by Coindesk | gepubliceerd op Coinage
Vermeld in dit artikel
Blockchain Bites: Bitcoin's Run, Uniswap's Hemorrhaging Value, Anchorage's Banking Bid
Bitcoin is nearing all-time highs in price and market cap last set three years ago.
Japan's megabanks to lead experiment with digital yen
We have, in order, Cheese Bank with a $3.3 million theft, Akropolis with its $2 million loss, Value DeFi with a whopping $6 million exploit and finally Origin Protocol's loss of $7 million.
Number of new Bitcoin addresses spikes amid growing FOMO
Japan's three largest banks, as part of a group of 30 private sector actors, are set to collaborate on an experiment with a digital yen.
Not just Wall Street: Quant trader explains why Bitcoin price is going up
Sam Trabucco, a quantitative trader at Alameda Research, believes four general factors are pushing up the price of Bitcoin.