Coinbase started USDC Lending

A Coinbase Step by step it makes the latest function available, so that users can set up their USDC on Onhain, currently up to 10.8%. An open blockchain credit system (Morpho) works in the background. Your paid amount is an automatic blockchain -active “invoice” It treats it and distributes it between different loan markets to get a better return. All this runs on the basic network (this is the own Ethereum-based Coinbase system), but for you this is the push of a button.

How does it work in practice?

When you pay USDC, Coinbase makes a smart contract in your name that spreads the money between multiple credit pools to optimize the yield. Once you have placed your USDC, you will immediately start getting a yield and you can be requested at any time at the liquidity. The user feels that his money is on onchain, while the app interface remains the usual.

How is it different than “USDC Rewards”?

Coinbase is still available for “USDC Rewards”, which is currently approximately. It offers an annual interest rate (4.5% for Coinbase One -members). This is not a rent, but a kind of loyalty program in which the interest is paid by Coinbase itself from its own money. New Onchain Loans, on the other hand, are on real blockchain loan markets. That is why the yield can be much higher, but not: it depends on the market situation and also entails certain risks (eg defects in smart contracts, suddenly lack of liquidity, market fluctuation).

Where is it available?

The service is not accessible everywhere, but is gradually switched on. It will be the first to be launched in some parts of the United States (except New York), as well as Bermuda and various foreign markets, such as Hong Kong, the United Arab Emirates, New Zealand, Philippines, Taiwan and South Korea. It will be available for new users in the coming weeks.

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Why now? – Coinbase “Onchain” strategy

This step fits far into the Coinbase strategy, which are random to bring customers closer to the blockchain economy. They do not work with Morpho for the first time: a solution was launched at the beginning of the year where users can borrow a loan in USDC with Bitcoin cover.

The first credit line of $ 100,000 has grown to $ 1 million today. In addition, Coinbase has launched the second Stablecoin Bootstrap Fund, which aims to offer more liquidity in the Defi and thus to create more predictable interest and deeper stabilecoin market.

What is it worth weighing?

In exchange for a higher yield, there is also a risk. Lending on the blockchain must take into account the possibility of smart contract errors, market exchange rate fluctuations and that you may not have immediately access to your money with a larger recording.

Coinbase tried to pack it in a user-friendly form to make the experience similar to the usual central exhibition, but in the background it actually works with a Defi protocol. For those who are more important to have a stable, predictable reward, the USDC Rewards program is still there; However, the person who wants a higher but changing yield can offer a better chance for Onchain -Loingen.