Coinbase’s USDC Bootstrap Fund to Provide $1.1M In Liquidity for DeFi DApps Uniswap, PoolTogether

By April 1, 2020DApps
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Coinbase's USDC Bootstrap Fund to Provide $1.1M In Liquidity for DeFi DApps Uniswap, PoolTogether

Coinbase has announced on Wednesday that it has put $1.1 million USDC into the Uniswap and PoolTogether Ethereum DeFi Applications (DApps).

The investment is from the USDC Bootstrap Fund that was launched with $2 million in initial funding by Coinbase in September last year. Uniswap, a liquidity provider for Ethereum, and PoolTogether, a ‘no-loss‘ lottery DApp that helps you earn through savings. The USDC Coinbase funded into the two projects is not to be considered an investment, but more a deposit into both of the applications' liquidity.

More on Uniswap

The USDC/ETH Uniswap liquidity pool is going to receive $1 million from Coinbase. The Dapp works better when the pools are bigger. Here’s what the founder of Uniswap, Hayden Adams, had to say about this:

“It provides a significant improvement to prices on that pool. The pool can support larger trade sizes and more volume.”

Uniswap sets matched pools when an ERC-20 token gets paired with the same value of ETH. The tokens can be traded for one another by users, but without ever touching the middle ETH. Increasing the funds for each pool causes the bandwidth for any ERC-20 token to expand. In a broader market, small pools get out of line easier than large pools, so they’re better to integrate with apps.

More on PoolTogether

Coinbase will inject $100,000 in USDC into PoolTogether's daily price in their ‘no-loss' lottery. PoolTogether works by users making USDC or DAI deposits that go into Compound to earn interest. Depending on the token, one user wins all the interest every week or every day.

Tokens can be withdrawn at any time and those who lose always get a second chance with the following pool. PoolTogether is nothing like sponsored pools, in which funds are going into the pot and there’s no possibility to win the prize. Here’s what Leighton Cusack, its founder, had to say about it:

“We do see a lot of players – especially larger ones – tracking the sponsorship. Since a significant portion of the prize pool is sponsored it makes a pretty big impact on the expected value and return players see.”

It’s a good idea to boost PoolTogether as much as possible. In early March, the site’s USDC daily prize was $45, whereas yesterday it was only $2. The entire DeFi sector is in fact down, so USDC deposits on Compound are paying around 0.46% at the moment.

The investment is from the USDC Bootstrap Fund that […]

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