Sep 4, 2025
Arrakis Alpha
Key Insights
Retail orderflow goes onchain. Coinbase now routes trades for select pairs onchain to DEXs on Base (Uniswap, Pancakeswap, Aerodrome) via aggregators
Early beta traction. The feature was extended to ~5% of the users and 2654 markets were traded onchain vs 458 markets on Coinbase CEX in 13 years.
Long-tail dominance. Flow is fragmented across meme coins, creator tokens, and Base-native experiments; no single asset dominates.
AMMs scale, order books stall. AMMs + aggregators support hundreds of long-tail pairs without the need to list or pay market makers.
Yield stables as next driver. Yield bearing assets such as syrupUSDC, sUSDe, sUSDS and Pendle markets exist only onchain; Coinbase routing will be a key driver of TVL
Strategic unlock. Base is becoming the execution + liquidity layer for Coinbase’s retail base, driving a flywheel of more tokens → more users → more issuers.
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Data powered by Dune.
Coinbase has begun routing orderflow directly into Base’s DeFi stack. Trades in the Coinbase app for certain pairs are now executed via DEX aggregators, flowing into Uniswap, Aerodrome, and PancakeSwap.
The rollout is still in beta (~5% of users).
Coinbase Wallet and Base App have merged, embedding DEX access behind a familiar interface.
For the first time, Coinbase is letting AMMs carry retail flow instead of its own order books.
Onchain Data: Early But Telling
In some weeks of beta testing:
2,654 unique markets were traded onchain vs 458 total Coinbase CEX markets over 13 years
https://dune.com/queries/5680148/9224826
Volumes are still low around $3.5M total volume or 0.02% of daily Base DEX volume, but the unlock is clear. Even in a small test group, Coinbase users are exploring long-tail tokens that CEX infrastructure could never support.
7 Day Average daily volume is around $210k with around 720 average transactions getting routed
https://dune.com/queries/5680148/9224810
From the orderflow that’s coming through the integration currently roughly 40% is routing through Uniswap, 25% through Aerodrome and 25% through Pancakeswap and less than 10% through all other DEXs.
What’s Being Traded? Long-Tail Dominance
Token data highlights the shift:
Governance and Utility Tokens (e.g. KTA).
Memecoins (e.g. RGOAT)
Creator tokens (e.g. BALAJIS).
A long tail of Base-native experiments, each with small but steady flows.
https://dune.com/queries/5680025/9224662
The spread is highly fragmented, no single asset dominates - showing how retail demand is dispersed across hundreds of tickers.
Long-Tail Liquidity: Why DEXs Outperform CEXs
CEX order books don’t scale on long-tail listings:
Every new asset requires dedicated market makers willing to counterparty trade the token.
Legal/compliance reviews slow listings and filters out experimental tokens.
Liquidity incentives (rebates, fee discounts) are costly and often temporary.
Even DeFi CLOBs like Hyperliquid face similar constraints, as evidenced by the auction overhead required to spin up and sustain a new listing on Hyperliquid Core.
By contrast:
AMMs allow instant liquidity for any token.
Solutions like Arrakis Pro allow token issuers to create deep onchain liquidity, comparable with CEX order books, but on AMMs.
Aggregators route flow across venues, optimizing execution.
Result: Coinbase supported many more unique assets on Base in weeks than in its entire CEX history.
Beyond Swaps: Borrowing & Yield
Coinbase has extended the same playbook to lending:
USDC vaults deliver lending yield.
cbBTC-backed loans via Morpho and Moonwell.
Total Outstanding Borrows through Coinbase ~$680M
https://dune.com/queries/5287199/8679674
Weekly volumes on Coinbase Borrow are currently outpacing the DEX integration, averaging more than $30M in recent weeks. This reflects the fact that Borrow is a more mature product, already rolled out in production, whereas the DEX integration remains in early beta.
https://dune.com/queries/5287199/8679649
Coinbase Borrow aggregates a DeFi yield/credit primitive that CEXs typically won’t be able to replicate offchain.
This is also where yield-bearing stables and Pendle come into play:
Tokens like syrupUSDC (Maple), sUSDe (Ethena), sUSDS (Sky) have real liquidity only onchain. The most scalable way to extend access to these yield-bearing assets for CEX users is by aggregating their DEX liquidity directly onchain.
Pendle builds fixed-yield markets and yield-trading primitives around these assets, structures that would be extremely difficult, if not impossible, to replicate offchain.
Since these primitives aren’t accessible on CEXs, Coinbase’s DEX routing could be the only path to capture that flow.
Expect future volume growth here as yield-bearing stables become core collateral and trading instruments.
Strategic Unlock for Base
The implications are structural:
Users: seamless access to thousands of tokens + onchain yield products.
Issuers: deploy on Base → instantly accessible to Coinbase’s retail base.
This creates a flywheel: more tokens → more users → deeper liquidity → stronger issuer incentives.
Base is evolving into the execution and liquidity layer behind Coinbase’s retail distribution.
Looking Forward
Today, Coinbase’s routed trades are still a small slice of Base’s total onchain volume, as expected in early beta. Although, the signal is clear:
Retail users want to engage with long-tail assets when surfaced through a familiar interface.
Lending Borrowing and Yield Bearing Assets could add utility beyond just swaps.
As access expands from 5% of users to the full Coinbase userbase, routed orderflow could become one of the largest sources of organic retail liquidity onchain.
For Coinbase, this marks the evolution from an exchange to being the retail frontend to the onchain economy.
For Base, it positions the chain as the liquidity backbone of America’s largest crypto userbase.
This could be the blueprint of how CeFi distribution and DeFi liquidity converge into a single market structure.
