Coinbase A Jan. 16, 2016 release stated that the company had entered into a partnership on January 16 with Morpho, a money-market to provide on-chain USD Coin loans (USDC), backed by Bitcoins (BTC).
Coinbase’s service allows its users to obtain USDC through the pledge of Bitcoin. Lending is processed by layer-2 base blockchain. The collateral is converted automatically to Coinbase Wrapped Bitcoins on a 1:1 basis before being transferred to Morpho.
Borrowers can access up to $100,000 in USDC, with interest rates determined dynamically by Morpho’s market-driven mechanism.
On-chain loans offer flexibility with no fixed repayment schedule, but users must monitor their loan-to-value ratio to avoid liquidation if the collateral’s value drops.
Morpho has now become the 12th largest decentralized application in terms of total locked value, and is expected to reach $3.2 billion with a 444% increase by 2024. .
DeFi expansion
Coinbase’s initiative reflects the importance of decentralized finance (DeFi) tools to the firm’s expansion plans.
In its announcement, the exchange described this new service as an important step in bringing financial instruments from the traditional world into the cryptocurrency market. You can borrow USDC and convert it to US Dollars for free.
This service can also be positioned as an alternative for Bitcoin sellers who wish to avoid paying taxes on capital gains and losses. Investors who want to access liquidity but avoid taxable events may find this aspect appealing.
The move comes after Coinbase launched cbBTC in September, which enabled customers to transfer Bitcoin onto on-chain environments.
Dune Analytics dashboard CbBTC was created by user eekeyguy and has now surpassed $2.1 Billion in its supply, or 21,495.46 BTC. Wrapped Bitcoins (WBTC). The 13.4% drop in the price of a car Despite its size of over 132,000 BTC, the market has seen a decrease in demand over this period.
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