Coinbase Launches ETH-Backed On-Chain Loans with Morpho
- Coinbase launches ETH-backed loans with Morpho partnership.
- Allows borrowing up to $1 million USDC.
- ETH and WETH used as collateral.
Coinbase, in collaboration with Morpho, has launched an ETH-backed on-chain lending product allowing qualified U.S. users to borrow up to $1 million USDC using ETH/WETH as collateral.
The launch signifies a pivotal step in DeFi’s evolution, enhancing on-chain lending accessibility and potentially increasing ETH’s utility and demand within decentralized financial ecosystems.
Coinbase has introduced a new ETH-backed on-chain lending product in collaboration with Morpho, enabling users to borrow up to $1 million USDC. This product utilizes the Base Layer 2 network for enhanced efficiency in loan transactions.
Key figures involved include Brian Armstrong, CEO of Coinbase, promoting innovation in crypto products, and Paul Frambot, Founder of Morpho, known for his work in DeFi. The loans exclude users in New York State.
The offering allows borrowing against ETH/WETH, utilizing a 75% loan-to-value ratio. This move is expected to increase the on-chain utility of these assets, as they will be heavily engaged for lending purposes.
This product also permits liquidation if the collateral value falls below an 86% threshold. The increase in BTC-backed loan caps highlights expansion in institutional DeFi engagement.
Previously, similar crypto-backed lending products from platforms like MakerDAO led to growth in ETH total value locked. Coinbase’s activities reflect a rising trend toward integrating centralized exchanges with DeFi protocols.
Future implications include fluctuation in on-chain collateral utility and the maturation of DeFi lending infrastructure. The involvement of Base network and Morpho enhances the ecosystem’s capacity to manage substantial liquidity.
We believe composable, on-chain lending is pivotal for the next wave of crypto adoption. — Brian Armstrong, CEO, Coinbase
