Coinbase Just Launched ETH-Backed Loans, Powered By Ethereum DeFi

Since 2022, borrowing against crypto collateral has largely shifted to onchain DeFi users, requiring wallets, bridging, risk assessments, and a real comfort navigating DeFi protocols.

One of the few crypto-backed loan products to enjoy monster growth this year was BTC-backed loans by Coinbase, originating over $1.2B in loan value. These loans are created using a risk isolated market in Morpho on the Ethereum L2 Base, where users deposit cbBTC collateral and then borrow USDC. Coinbase users have enjoyed using this product without any additional paperwork required—no credit report, no application, no middlemen.

Just deposit cbBTC, borrow USDC at competitive rates thanks to the pool of capital in Morpho, and pay back the loan when they feel like it.

But yesterday, Coinbase expanded its crypto-backed loans product suite to include ETH-backed borrowing, allowing everyday users to unlock USDC liquidity in seconds without selling their crypto. Under the hood, it’s also powered by Morpho markets on the Ethereum L2 Base.

If you consider where DeFi started with the now failed lending platforms of last cycle, such as Celsius and BlockFi, it’s a major milestone for onchain personal finance to once again offer powerful crypto-backed loans but this time with transparent rails and trustless infrastructure wrapped inside an intuitive, familiar app experience.

In a new episode of The Edge Podcast, we interview Coinbase Product Lead for Crypto-Backed Loans, Sid Ramesh, about how Coinbase built its new ETH-backed loans, how Morpho and Base power the product behind the scenes, and what Coinbase is planning next for the future of onchain financial services.

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Disclosure: DeFi Dad and Nomatic both hold ETH. Nomatic holds COIN.