Coinbase introduced a partnership with cash market Morpho on Jan. 16 to supply on-chain USD Coin (USDC) loans backed by Bitcoin (BTC), in line with a Jan. 16 launch.
The service will permit Coinbase customers to borrow USDC by pledging Bitcoin as collateral. Loans are processed by means of the layer-2 blockchain Base. The collateral is mechanically transformed to Coinbase Wrapped Bitcoin (cbBTC) on a 1:1 foundation after which transferred to Morpho.
Debtors can entry as much as $100,000 in USDC, with rates of interest decided dynamically by Morpho’s market-driven mechanism.
On-chain loans provide flexibility with no fastened reimbursement schedule, however customers should monitor their loan-to-value ratio to keep away from liquidation if the collateral’s worth drops.
Morpho is now the Twelfth-largest decentralized utility by complete worth locked, reaching over $3.2 billion in 2024 with a 444% progress, in line with DefiLlama information.
DeFi enlargement
Coinbase’s initiative displays the significance of decentralized finance (DeFi) instruments to the agency’s enlargement plans.
Within the announcement, the trade framed the brand new service as a step towards bringing conventional monetary instruments into the crypto market. Customers can convert borrowed USDC to US {dollars} without cost.
The service can be positioned as a tax-efficient various to promoting Bitcoin, probably enabling customers to defer capital positive aspects or losses. This facet could enchantment to buyers in search of to unlock liquidity with out triggering taxable occasions.
This transfer follows Coinbase’s September launch of cbBTC, which allowed clients to maneuver Bitcoin into on-chain environments.
In response to a Dune Analytics dashboard created consumer eekeyguy, cbBTC has surpassed $2.1 billion in provide since its launch, equal to 21,495.46 BTC. In the meantime, Wrapped Bitcoin (WBTC) fell 13.4% in provide over the identical interval, though its market measurement is over 132,000 BTC.
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Gino Matos
Gino Matos is a regulation college graduate and a seasoned journalist with six years of expertise within the crypto business. His experience primarily focuses on the Brazilian blockchain ecosystem and developments in decentralized finance (DeFi).