Coinbase partners with Morpho to introduce Bitcoin-backed loans on Base

Coinbase announced a concern with wealth marketplace Morpho connected Jan. 16 to connection on-chain USD Coin (USDC) loans backed by Bitcoin (BTC), according to a Jan. 16 release.

The work volition let Coinbase users to get USDC by pledging Bitcoin arsenic collateral. Loans are processed done the layer-2 blockchain Base. The collateral is automatically converted to Coinbase Wrapped Bitcoin (cbBTC) connected a 1:1 ground and past transferred to Morpho. 

Borrowers tin entree up to $100,000 successful USDC, with involvement rates determined dynamically by Morpho’s market-driven mechanism.  

On-chain loans connection flexibility with nary fixed repayment schedule, but users indispensable show their loan-to-value ratio to debar liquidation if the collateral’s worth drops.

Morpho is present the 12th-largest decentralized exertion by full worth locked, reaching implicit $3.2 cardinal successful 2024 with a 444% growth, according to DefiLlama data.

DeFi expansion

Coinbase’s inaugural reflects the value of decentralized concern (DeFi) tools to the firm’s enlargement plans.

In the announcement, the speech framed the caller work arsenic a measurement toward bringing accepted fiscal tools into the crypto market. Users tin person borrowed USDC to US dollars for free.  

The work is besides positioned arsenic a tax-efficient alternate to selling Bitcoin, perchance enabling users to defer superior gains oregon losses. This facet whitethorn entreaty to investors seeking to unlock liquidity without triggering taxable events.   

This determination follows Coinbase’s September motorboat of cbBTC, which allowed customers to determination Bitcoin into on-chain environments. 

According to a Dune Analytics dashboard created idiosyncratic eekeyguy, cbBTC has surpassed $2.1 cardinal successful proviso since its launch, equivalent to 21,495.46 BTC. Meanwhile, Wrapped Bitcoin (WBTC) fell 13.4% successful proviso implicit the aforesaid period, though its marketplace size is implicit 132,000 BTC.

The station Coinbase partners with Morpho to present Bitcoin-backed loans connected Base appeared archetypal connected CryptoSlate.