Coinbase (COIN) Stock: Exchange Lets ETH Holders Borrow Millions Without Selling

TLDR

• Coinbase launched Ethereum-backed loans allowing US users to borrow up to $1 million in USDC against their ETH holdings without selling
• The service operates through Morpho protocol on Coinbase’s Base network and is available in most US states except New York
• Coinbase’s onchain lending markets have processed over $1.25 billion in loan originations with roughly $810 million in outstanding loans
• Users must maintain a loan-to-value ratio below 86% to avoid automatic liquidation due to price volatility
• The exchange plans to expand the program to other assets including cbETH, its staked Ether token

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Coinbase rolled out Ethereum-backed loans for eligible US customers on Thursday. The new service allows users to borrow up to $1 million in USDC stablecoin against their ETH holdings.

The product runs on Morpho, a decentralized finance lending protocol integrated into Coinbase’s Base Layer 2 network. Users can access the loans through Coinbase’s platform interface while the actual lending happens through Morpho’s smart contracts.

The service is available across most US states. New York residents cannot access the product due to state regulatory restrictions.

Users deposit Ethereum as collateral and receive USDC without creating a taxable event. This differs from selling cryptocurrency directly, which would trigger capital gains taxes.

The loan structure requires borrowers to keep their loan-to-value ratio below 86%. If cryptocurrency prices drop and the ratio hits this threshold, the position faces automatic liquidation.

Base Network Lending Growth

Coinbase’s onchain lending markets have processed more than $1.25 billion in loan originations according to Dune data. The network holds about $1.37 billion in deposited collateral.

Roughly $810 million in loans remains outstanding across the platform. More than 13,500 wallets currently hold active borrow positions.

The exchange integrated Morpho into the Coinbase app in September. That integration offered users yields of up to 10.8% on their USDC holdings.

Coinbase raised its Bitcoin-backed loan limit to $5 million several weeks before launching the ETH product. The exchange plans to add more assets to the lending program including cbETH, its staked Ether derivative token.

Recent Platform Expansion

Coinbase bought Echo for $375 million in October. The platform, created by crypto investor Jordan Fish, helps communities fund early-stage crypto projects and startups.

The exchange also enabled crypto staking for New York residents in October. That same month, Coinbase partnered with Citigroup to help the bank move client funds between crypto and traditional currencies.

On November 10, Coinbase unveiled a platform for initial coin offerings. The service brings regulated token sales back to US retail investors for the first time since 2018.

The exchange plans to list roughly one token sale per month. Monad’s token sale launches Monday as the first offering.

Tech researcher Jane Manchun Wong posted Thursday that Coinbase is developing a prediction market website. The platform appears to be backed by Kalshi based on her findings.

The loan program represents one of Coinbase’s largest DeFi-integrated offerings to date according to the company.

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