- Borrow up to $1M in USDC against ETH without selling your holdings.
- Available to eligible users across most U.S. states, excluding New York.
- Powered by Morpho and operating on Base with variable, market-driven rates.
- Target LTV up to 75% and automated liquidations near 86% LTV.
Coinbase has introduced a new lending option that lets eligible U.S. customers borrow USDC against their Ethereum holdings, enabling access to liquidity without selling ETH.
Built in partnership with Morpho and running on Base, the product features interest rates guided by supply and demand. There’s no fixed repayment schedule, and borrowers can request as much as $1 million in USDC against their collateral, subject to risk parameters and ongoing market conditions.
How ETH-backed borrowing works
When a user initiates a loan through Coinbase’s interface, deposited ETH is converted to wrapped ETH (WETH) for use as collateral. Borrowers can maintain exposure to the underlying asset while accessing USDC, aligning with a common goal in crypto finance: staying invested while tapping short-term liquidity.
The platform targets a maximum loan-to-value (LTV) of up to 75%, with safeguards that trigger automated liquidation if the LTV drifts toward about 86%. These thresholds adjust dynamically, meaning the collateral ratio can move with price swings, accrued interest, and any partial repayments.
Rates are market-driven via Morpho, and loans function without a fixed maturity. Users can repay anytime to reclaim collateral, or reduce exposure if volatility raises their LTV. This flexibility is central to the product’s design, though it also means borrowers should monitor positions, especially during rapid price moves.
Coinbase notes that borrowed USDC isn’t intended for direct trading within its centralized exchange interface. Instead, the funds are available on-chain, making them suitable for a range of decentralized finance activities, payments, or treasury use cases.
Availability spans most U.S. states except New York. Eligibility, limits, and APRs may vary by user profile and market conditions, and Coinbase indicates international access could be phased in later.
Why Morpho and Base matter
The loan program runs on Base, Coinbase’s Ethereum Layer 2, chosen for lower fees and faster settlement compared with mainnet. Morpho provides the decentralized lending rails, with risk parameters and interest dynamics that reflect on-chain liquidity and demand.
Coinbase previously integrated Morpho inside the app, allowing customers to access yield opportunities on USDC, with advertised rates that have reached double digits at times. The same integration approach underpins these ETH-backed loans, streamlining user onboarding to DeFi while maintaining a familiar Coinbase experience.
Early traction and on-chain stats
Coinbase’s on-chain lending markets have already processed more than $1.25 billion in originations, supported by roughly $1.37 billion in collateral deposited, according to community dashboards. Outstanding loans total around $810 million, with approximately 13,500 wallets currently maintaining active borrowing positions.
ETH is the first major expansion beyond the earlier Bitcoin-backed program, which helped validate demand for on-chain credit delivered through a compliant, exchange-linked interface. Extending the same model to Ethereum broadens the collateral base and opens the door to more asset support.
Roadmap and asset expansion
Coinbase plans to add support for staked ETH via cbETH as a collateral option, letting customers put yield-bearing assets to work. The company has also signaled its intent to expand collateral eligibility to other tradable cryptocurrencies over time, subject to risk and regulatory reviews.
Beyond U.S. coverage, Coinbase hints at a staged geographic expansion once the product matures, bringing the same borrow-against-collateral model to a wider audience as infrastructure, compliance, and demand line up.
Risks, costs and eligibility
As with any collateralized loan, borrowers face liquidation risk if ETH prices drop or interest accrues enough to push LTV higher. Managing collateral buffers, tracking APRs, and repaying or topping up in periods of volatility are prudent steps to limit forced sell-offs.
APR is variable and can change with market conditions on Morpho. Users should review fees, limits, and disclosures in-app before borrowing, and consider tax and accounting implications when leveraging digital assets as collateral.
For customers who want to access working capital while preserving long-term exposure to Ethereum, this offering brings a familiar Coinbase interface to the mechanics of DeFi lending. By combining Base’s scalability with Morpho’s liquidity and risk engine, the exchange is extending its on-chain credit footprint with a product that keeps users’ ETH in play while making USDC accessible when needed.
