TLDR
- Coinbase unlocks DeFi yields with new USDC lending powered by Morpho.
- Earn up to 10.8% APY with Coinbase’s seamless DeFi-powered USDC lending
- Coinbase integrates Morpho to bring scalable DeFi lending yields in-app.
- Onchain finance grows as Coinbase launches USDC DeFi lending with Morpho.
- Coinbase boosts DeFi access, offering high-yield USDC lending globally.
Coinbase has launched a new USDC lending feature, offering onchain yields directly within its platform. This service allows users to deposit USDC and earn interest via DeFi infrastructure powered by Morpho. The initiative marks a significant expansion of Coinbase’s efforts to integrate decentralized finance into its core ecosystem.
The USDC lending mechanism routes user deposits through Morpho Vaults, which Steakhouse Financial actively manages. These vaults allocate capital across optimized lending markets to balance risk and return. Depositors earn yield as borrowers, including users of Coinbase’s crypto-backed loans, pay interest.
Since its initial rollout, the crypto-backed loan product has already originated over $900 million in loans. By combining lending and borrowing, Coinbase now provides a complete onchain financial suite. This closed-loop system creates internal liquidity, improving the overall scalability of both products.
Coinbase Boosts Returns with DeFi Infrastructure
This new USDC lending option differs from Coinbase’s existing “USDC Rewards” program, which pays a flat APY funded by Coinbase. In contrast, the new service taps real DeFi markets, and yields are driven by actual borrowing demand. Users can now earn up to 10.8% APY based on market conditions.
When users deposit USDC, Coinbase creates smart contract wallets to deploy funds across Morpho-powered lending pools. These operations happen on Base, Coinbase’s Ethereum Layer 2, ensuring fast and cost-efficient execution. Capital allocation decisions remain automated, while users retain the flexibility to withdraw anytime.
Because funds remain in Coinbase-managed smart contracts, users never leave the Coinbase app. This makes the process simple while maintaining the power of decentralized infrastructure. As a result, Coinbase has effectively merged DeFi’s benefits with a familiar user interface.
DeFi Mullet Strategy Powers User Experience
Coinbase’s strategy reflects the “DeFi Mullet” model — fintech simplicity up front with DeFi complexity at the back. Users benefit from a smooth interface while Morpho and Steakhouse manage complex backend risk and allocations. This approach continues to gain traction among platforms bridging TradFi and DeFi.
USDC lending plays a key role in this blueprint by giving users a direct channel to decentralized yield opportunities. It also enables global borrowers to access liquidity, creating a flywheel effect for the Coinbase ecosystem. This symbiosis increases product stickiness and drives platform-wide engagement.
