Coinbase is changing the world.
In case you missed it, Morpho has teamed with Coinbase to offer loans. Coinbase customers (except New Yorkers who are not eligible, much to some colleagues’ disappointment) can now borrow USDC against their bitcoin held in Coinbase. It’s pretty cool, isn’t it? Another sign that the times are changing.
Blockworks data whiz Dan Smith joined Empire’s round-up this week, telling host Jason Yanowitz that he thinks the announcement is a win for bitcoin… with some caveats.
“ Bitcoin’s money, they [Coinbase] want it to be everywhere,” Smith added. The asterisk is, as Smith called it, that the borrower must now trust Morpho to hold the bitcoin on Base as collateral. This is a situation that can be incredibly stressful.
Smith has pointed out that Coinbase, as the US’s largest central exchange is a positive.
Some people will be satisfied with that to trust Morpho or Coinbase in the handling of their bitcoin loan.
Max Branzburg is the VP for Product of Coinbase.
Smith also mentioned in this episode that Morpho, a blockchain lending startup, and Coinbase are a great match.
Morpho is the preferred choice for Branzburg Coinbase because of its versatility. “built some really great products in this area, and has built protocols that are very well audited that are safe, secure, [and] provide that kind of value.”
However, he is not ruling other potential integrations of other projects out.
“As more people are building on base, we’ll find ways to bring Coinbase users to those builders,” Branzburg was said.
One of my personal burning questions was, “Why bitcoin?” and, is it only going to be bitcoin?
A few weeks ago, when I spoke with Haynes Boone partner Matthew Frankle, we discussed the rising appetite for bitcoin margin loans (which unfortunately didn’t make its way into this newsletter…yet). Coinbase has just announced a major partnership.
Branzburg answers the question in the first paragraph by saying that Bitcoin’s the answer. “OG.” The formula is similar to the one Coinbase followed when it released its bitcoin wrapped product, last year. It enabled people to leverage their bitcoin exposure through Base.
“That was a pretty cool breakthrough a few months ago, but you still had to go take your bitcoin, get it into your wallet, navigate the protocols, figure out how to use it. What’s happening here is, under the hood, we’re doing all of that for you, abstracting all that complexity away,” He explained.
It gives the customer a possible value addition for their bitcoins (and, of course, keeps them from becoming dusty).
Last thing I learned was that Coinbase’s on-chain lending is only the beginning.
“This roadmap will expand to other assets over time as well,” Branzburg said to me.
Coinbase’s move to onchain is a good thing for the crypto industry.
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