Coinbase is stepping further into on-chain finance with a new lending feature that lets eligible U.S. users borrow up to $1 million in USDC using their Ethereum as collateral. The service allows customers to access liquidity without selling any ETH, building on Coinbase’s recent move to raise its Bitcoin-backed loan limit to $5 million.
The loans run through Morpho, a lending protocol built on Base, Coinbase’s Layer 2 network. While Coinbase provides the interface, all lending activity happens through Morpho’s smart contracts, giving users DeFi-level access with a familiar centralized experience.
The product is available across most of the U.S., except New York due to local regulations. Users lock up ETH and receive USDC without creating a taxable event. Like other crypto-backed loans, they need to watch their LTV ratio, since liquidations kick in automatically at 86% to account for ETH’s price swings.
Coinbase plans to expand the feature to support additional collateral types, including cbETH, its staked ETH token. The launch comes as onchain lending on Base surpasses $1.25 billion.
Morpho has seen strong inflows as traders and long-term holders use borrowing tools to unlock liquidity without giving up exposure. With this move, Coinbase is positioning itself as a key player in the growing crypto credit sector.
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