Crypto exchange Coinbase has begun rolling out a new feature that lets users lend their USDC stablecoin holdings onchain, with yields currently up to 10.8%.
The service is powered by Morpho, a decentralized lending protocol, with allocations managed through onchain vaults curated by Steakhouse Financial on Base, the Coinbase-incubated Ethereum Layer 2 network.
When users deposit USDC, Coinbase creates a smart contract wallet that routes funds across different lending pools to optimize returns. Users start earning yield immediately and can withdraw at any time, subject to liquidity, Coinbase said.
Coinbase stressed that while the feature relies on DeFi protocols, it is designed to feel familiar and accessible to mainstream users through the Coinbase app.
Different from 'USDC Rewards'
Coinbase already offers "USDC Rewards," paying 4.1% annual percentage yield or APY (4.5% for Coinbase One members). By lending USDC onchain, users can earn significantly higher yields, the exchange said.
"USDC Rewards does not involve lending customer assets — it’s a customer loyalty program offered at Coinbase’s discretion, and with payouts coming directly from Coinbase’s marketing budget," a Coinbase spokesperson told The Block.
The USDC onchain lending feature is available to some users starting today, with a wider rollout planned over the coming weeks in the U.S. (excluding New York State), Bermuda, and other international markets. Coinbase said the launch is part of its push to connect customers more directly to the onchain economy.
This is not Coinbase's first collaboration with Morpho, a portfolio company of Coinbase Ventures. Earlier this year, the exchange launched Bitcoin-backed onchain loans through Morpho, currently allowing customers to borrow up to $1 million in USDC (from a previous limit of $100,000) against their Bitcoin holdings on Coinbase.
Last month, Coinbase launched its second Stablecoin Bootstrap Fund — nearly six years after its first in 2019 — to boost stablecoin liquidity across DeFi protocols, including Morpho. The program, managed by Coinbase Asset Management, aims to expand access to stablecoins and help stabilize rates across decentralized markets.
