17.01.2021

Coinbase Launches USDC-Based Initiative to Support DeFi Developers

As the company announced on Sept. 10, Coinbase set up the USDC Bootstrap Fund to support developers who build DeFi protocols by investing USD Coin (USDC) directly in the protocol. Coinbase and payment startup Circle jointly launched their own stablecoin USDC in September 2018.

Cryptocurrency trading platform Coinbase has launched the new USDC Bootstrap Fund aimed at the improvement of Decentralized Finance (DeFi).

Bringing more liquidity to DeFi protocols

Bringing more liquidity to some DeFi protocols ostensibly formed the main impetus behind the idea to establish the fund. Among possible investments, Coinbase named smart contracts, while returns are set to be provided by a counterparty – a borrower or taker. Reportedly, any counterparty who provides crypto collateral and pay interest can borrow USDC tokens.

Additionally, Coinbase announced the two first investments through the USDC Bootstrap Fund – 1 million in USDC to Compound, and 1 million in USDC to dYdX.

Digital assets uptake

In August, CEO of Coinbase Brian Armstrong said that 2019 was the year of reckoning for institutional Bitcoin uptake, with the trend now obvious. “We’re seeing $200-400M a week in new crypto deposits come in from institutional customers,” Armstrong stated.

Earlier in September, Offchain Labs opened up the Alpha version of its Ethereum (ETH) scaling solution, dubbed Arbitrum, following investment from Coinbase Ventures. The solution will purportedly enable processing speed of more than 500 transactions per second for Ethereum applications.

Also this month, Cointelegraph reported that Coinbase and Ripple, the blockchain startup behind XRP, fell out of the top 10 of this year’s business and employment-oriented service Linkedln’s “The 50 hottest U.S. companies to work for” list.

Coinbase Launches Price Feed to Help Secure $1 Billion DeFi Economy

Cryptocurrency exchange Coinbase has released a price oracle that allows anyone to publish price data on-chain. The Coinbase Oracle, a signed price feed, grants users free access to data for BTC-USD and ETH-USD markets, the company announced Thursday. The idea is to make decentralized finance more secure.

The price feed is sourced from Coinbase Pro and is updated every minute, the company explained. An oracle is a real-time price feed provided by a third party to decentralized financial networks (DeFi). The most widely used oracles are those of Uniswap and Kyber. Decentralized networks use oracles to provide services that include derivatives, collateral liquidations, and margin.

However, existing price feeds, which anchor a $1 billion DeFi economy, have been criticized for a lack of security and a failure to provide accurate prices. There are instances of attacks. Crypto lender Bzx lost more than $645,000 worth of ETH in an oracle attack in February – the second such violation it has endured.

With its oracle, Coinbase is promising more safety. In a statement, the exchange detailed:

Anyone can publish the prices on-chain and since the data is already signed by Coinbase’s private key, there is no need to trust the publisher. Using the Coinbase price oracle public key, anybody can verify the authenticity of the data.

Coinbase highlighted the risks associated with getting data from off-chain sources. Using off-chain data requires trusting the publisher to post correct prices and keep the signing key safe, it said, adding that “the latter historically has proven to be a difficult problem, especially when stakes are high.”

By comparison, the Coinbase Oracle claims to host a filtering mechanism that rejects data points, which significantly deviates from the expected volatility of each asset while protecting against exchange price manipulation or invalid data.

Disclaimer: This article is for informational purposes only. It is not an offer or solicitation of an offer to buy or sell, or a recommendation, endorsement, or sponsorship of any products, services, or companies

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