Coinbase wants to support ‘responsible DeFi development’ through Base

Coinbase is making a big push to bring institutions over to crypto, with tokenized real-world assets taking center stage


rarrarorro/Shutterstock modified by Blockworks


Coinbase is working to square regulations with decentralized finance (DeFi) as it moves to attract institutions to the space.

The exchange’s asset management arm recently debuted Project Diamond, a platform for mirroring debt instruments used in traditional finance by tokenizing them on Base, Coinbase’s layer-2 Ethereum network.

Project Diamond is pitched to help institutions create, buy and sell their own native digital assets. Coinbase says under 0.25% of global assets are currently represented on blockchains, and the effort is geared towards boosting that figure.

Coinbase is a public company regulated by the US Securities and Exchange Commission, and through its new real-world asset (RWA) platform the firm is looking to solidify its position as a middle ground through which institutions can explore crypto. 

“Institutional investors are expected to favor compliant platforms like Coinbase and Gemini,” said Danny Lim, a core contributor at MarginX. “Organizations will look to lower the barrier to entry for DeFi activities, potentially broadening the market base.”

Although, for now only registered institutional investors outside the US will be able to use Coinbase’s tokenization platform.

Coinbase has previously noted in a blog post that it views tokenization as an “industry shift from focusing on pure decentralization to a practical combination of centralized entities and semi-decentralized networks that can onboard additional users.”

Coinbase sees regulation improving decentralization

Stablecoins are some of the most ubiquitous RWAs in the crypto space.

Robert Leshner, founder of RWA-focused blockchain startup Superstate, previously noted at the Real World Asset Summit in New York that non-volatile assets — such as stablecoins — are much easier to program than volatile assets. 

This makes stablecoins and other tokenized pegged assets a key entry point for the transition from traditional finance into blockchain.

Stablecoin supplies have grown by more than $2.2 billion over the last quarter alongside increased activity in crypto markets. Tokenized treasures, another relatively stable asset, have also experienced significant growth by over 450% over the past year.

The growth in RWAs and their implementations have drawn criticism over centralization, particularly around reliances on oracles.

“Decentralization and regulation are not in conflict, in many instances they can inform and improve each other,” a Coinbase spokesperson told Blockworks. 

“At this stage in the development of blockchain technology we support responsible DeFi development because it grows the crypto ecosystem as a whole.”

Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the On the Margin newsletter.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.


Upcoming Events

Salt Lake City, UT

MON - TUES, OCT. 7 - 8, 2024

Blockworks and Bankless in collaboration with buidlbox are excited to announce the second installment of the Permissionless Hackathon – taking place October 7-8 in Salt Lake City, Utah. We’ve partnered with buidlbox to bring together the brightest minds in crypto for […]

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

Unlocked by Template.png


With the spot ETH ETF approval, the institutions are coming. stETH - given its dominance in marketshare, existing liquid market structures, and highly desirable properties - is poised for institutions.


Launching cryptocurrencies the old fashioned way may soon make a return


Kraken and CertiK brought their beef to social media after Kraken said researchers exploited $3 million through a bug


NVIDIA’s historic run is only deepening the divide between mega-cap tech stocks and the rest of the market.


EIP-7702 was quickly adopted for the next Ethereum upgrade, but developers haven’t quite locked it down