Skip to main content

Coinbase Introduces ETH-Backed Loans Up to $1 Million



Coinbase has also introduced its on-chain lending service with a new lending product that enables customers to borrow up to 1M USDC of Ethereum (ETH) as collateral. The offering is based on the Morpho lending protocol, and it uses the Coinbase Base network to provide the user with a comfortable interface, but it uses the infrastructure of decentralized finance. This is another strategic step taken by Coinbase because it enters the on-chain credit markets in a deeper way.

ETH as Collateral on Coinbase


The new option will enable the customer to commit to deposit wrapped ETH (WETH) as security in order to get liquidity in USDC without selling their assets. Coinbase affirmed that it would roll out staked ETH (also known as cbETH) in the future. The lending mechanism is operated by Morpho, but the retail users deal with each other directly using the Coinbase platform, which makes the process less complex than one that requires navigating the DeFi protocols.


Loan Terms and Liquidation Parameters


Borrowers are provided with loans up to a 75% loan-to-value (LTV) ratio, i.e., with every dollar of ETH pledged, they can get as much as 0.75 USDC. When the LTV is elevated to 86, then the collateral is at risk of being sold off. In these situations, Coinbase levies a liquidation fee, and the penalty sum gets deducted from the loan balance. ETH-backed loans have floating interest rates that are set based on the liquidity and the demand in the market on Morpho. Notably, there is no rigid repayment period; borrowers are given a chance to repay their loans in bits or in full at any time, provided they maintain a good LTV ratio.

Availability and Eligibility


The ETH-backed loan product is now accessible to confirmed Coinbase users in the United States except New York citizens. The borrowers are also able to deposit more collateral to stabilize their positions when the prices are volatile. Coinbase has further explained that the proceeds of the loans may not be utilized in trading on the exchange, further establishing its objective of the product being a liquidity solution with no leverage trading, but a liquidity solution.

Broader Implications for On-Chain Finance


ETH-backed loans have been launched by the company, following the success of Coinbase's Bitcoin-backed loans, which have already supported over $1.25 billion of aggregate borrowing volume. Due to the increasing demand for on-chain credit, the strategy implemented by Coinbase provides users with a hybrid experience—centralized accessibility and decentralized liquidity. The new loan is also an alternative to cash that allows long-term ETH holders to get money without a taxable transaction of disposing of their holdings.

Conclusion


Coinbase's ETH-secured loan product is a major evolution of the on-chain financial offering and the ability to offer more flexibility to crypto holders in their digital asset management. Although this offering is undoubtedly beneficial, including in the form of liquidity and the ability to repay it flexibly, users should be aware of price volatility and the liquidation risks of collateralized lending. Despite this, the acquisition makes Coinbase one of the biggest access points to regulated access to credit on-chain by a large number of retail and institutional investors.

https://www.cryptobreaking.com/coinbase-introduces-eth-backed-loans/?utm_source=blogger%20&utm_medium=social_auto&utm_campaign=Coinbase%20Introduces%20ETH-Backed%20Loans%20Up%20to%20$1%20Million%20
Labels:

Comments

Post a Comment

Popular posts from this blog

Coinbase's x402 launches AI agents app store for payments

Coinbase-backed x402 has unveiled Agentic.market, a dedicated marketplace aimed at increasing the usefulness of AI agents by aggregating thousands of apps and services that agents can access without any API keys. The rollout positions the platform as a central hub for agents to discover, evaluate, and deploy capabilities across a standardized payments layer. Coinbase product lead Nick Prince described Agentic.market in a video posted on X as a storefront for discovering, comparing, and using x402 services. The marketplace is designed to give both humans and their AI agents access to a wide range of tools—from data feeds to consumer apps—without the friction of managing API credentials. A storefront for discovering, comparing, and using x402 services. Thousands of services. Zero API keys. Powered by x402. Prince added that the market offers a web interface for humans to browse and assess services, alongside a programming layer that lets AI agents autonomously search, filter, and integra...
Post a Comment
Read more

Top Cryptocurrencies to Watch: BTC, ETH, BNB, XRP, Solana, Dogecoin & More

Market Analysis and Price Predictions for Key Cryptocurrencies Recent market dynamics reveal a cautious sentiment across the cryptocurrency landscape, with Bitcoin struggling to maintain levels above $90,000 and many major altcoins facing downward pressure. Indicators point toward reduced participation from both institutional and retail investors, raising concerns about a potential consolidation phase after notable gains earlier in the year. Bitcoin has fallen below $87,000, reflecting waning demand at higher price points. Institutional fund flows into BTC and ETH ETFs have turned negative, indicating a period of subdued market activity. Active addresses and Binance deposit/withdrawal activities are at annual lows, suggesting market indecision. Most leading altcoins are approaching support levels, with some poised for potential breakdowns. Tickers mentioned: Bitcoin, Ethereum, Binance Coin, XRP, Solana, Dogecoin, Cardano, Bitcoin Cash, Chainlink, Hyperliquid Sentiment: Neutral to Sli...
Post a Comment
Read more

Analyst: Bitcoin can reclaim $100K without a new narrative

Bitcoin has stalled below the $100,000 threshold, marking a run of almost five months without a breakout above that level. As of the latest market close, BTC hovered around $78,250 after a February nadir of about $60,000, underscoring a slow, grinding recovery amid broader market dynamics. In parallel, tech markets—especially AI-focused equities—have captured the spotlight, with investors rotating capital away from crypto in search of different risk-reward profiles. Nvidia (NVDA), the leading AI stock by market cap, has gained about 5.08% since the start of the year, while Bitcoin has faced a roughly 10% dip over the same period, illustrating a diverging performance within risk assets. MN Trading Capital founder Michael van de Poppe suggested that Bitcoin may not require a fresh narrative to push back above $100,000. In a post on X, he asked what narrative would drive BTC to the milestone and concluded that “price moves upwards, and the narrative will create itself.” He continued that ...
Post a Comment
Read more