TLDR
- Coinbase introduced Ethereum-backed loans allowing US customers to borrow up to $1 million in USDC against ETH collateral
- The lending service runs through Morpho protocol on Base network and excludes New York residents
- Base network has facilitated $1.25 billion in total loan originations with $810 million currently outstanding
- Borrowers face automatic liquidation if their loan-to-value ratio exceeds 86% due to market volatility
- Coinbase plans to expand lending options to include cbETH and other cryptocurrency assets
Coinbase launched Ethereum-backed loans for US customers this week. The service lets users borrow up to $1 million in USDC stablecoin using their ETH as collateral.
Coinbase Global, Inc., COIN
The product operates through Morpho, a DeFi lending protocol built on Coinbase’s Base Layer 2 network. Borrowers access the service through Coinbase’s platform while loans process via Morpho’s smart contracts.
Most US states can access the new lending feature. New York residents remain excluded due to state-level regulatory requirements.
Users deposit ETH and receive USDC without triggering a taxable event. This approach avoids the capital gains taxes that come with selling crypto directly.
The loan structure enforces an 86% loan-to-value ratio threshold. When cryptocurrency prices drop enough to breach this limit, positions liquidate automatically to protect lenders.
Base Network Reaches Major Lending Milestone
Data from Dune shows Coinbase’s onchain lending markets have processed over $1.25 billion in loan originations. The platform currently holds approximately $1.37 billion in deposited collateral.
Outstanding loans across the network total roughly $810 million. Over 13,500 wallets maintain active borrowing positions on the platform.
Coinbase integrated Morpho into its main app back in September. That integration provided users with yields reaching 10.8% on USDC deposits.
The exchange increased its Bitcoin-backed loan ceiling to $5 million weeks before rolling out ETH loans. Future plans include adding cbETH, Coinbase’s staked Ether token, to available loan collateral options.
Coinbase Accelerates Product Rollout
The exchange acquired Echo for $375 million in October. Echo enables crypto communities to fund early-stage projects and startups through its platform.
Coinbase activated crypto staking for New York users in October. The company also formed a partnership with Citigroup that month to facilitate client transfers between crypto and traditional currency systems.
The exchange launched an initial coin offering platform on November 10. This marks the return of regulated token sales to US retail investors since 2018.
Coinbase intends to host approximately one token sale monthly. Monad’s token sale kicks off Monday as the inaugural offering on the platform.
Growing DeFi Integration Strategy
Tech researcher Jane Manchun Wong revealed Thursday that Coinbase is building a prediction market website. Her research suggests the platform connects to Kalshi’s infrastructure.
The ETH loan program ranks among Coinbase’s largest DeFi-integrated products according to company statements. Morpho has seen increased deposits this week as traders use collateralized borrowing to access liquidity while keeping crypto exposure.
The lending expansion positions Coinbase within the expanding cryptocurrency-native credit sector. The exchange continues building out its DeFi offerings and borrowing products for major digital assets.
