- Instant liquidity
- Various risks
Coinbase now has expanded Their lending services include some of the most popular altcoins on the market.
The new feature makes it possible for US clients to borrow against their holdings without triggering a taxable event or losing their market position.
XRP, Dogecoin (DOGE), Cardano (ADA), and Litecoin (LTC) are among the supported coins. Users can borrow up to $100,000 in USDC, the second largest cryptocurrency.
Morning Crypto Report:
Instant liquidity
The new feature is designed for speed and efficiency. Users will get “instant” liquidity with the help of their coins.
This cryptocurrency-backed facility allows investors to access cash (via the USDC stablecoin) immediately while keeping their long-term investment strategies intact. This distinguishes Coinbase from traditional lending products that often require lengthy approval processes.
card
It is worth noting that the leading US exchange chose to rely on a decentralized infrastructure to power the aforementioned product.
The exchange confirmed that the lending engine is “powered by Morpho” and “running on Base,” Coinbase’s own Layer-2 network.
This integration shows a growing trend of centralized exchanges (CEX) using decentralized finance (DeFi) protocols to improve user utility.
The service is available immediately to customers in the United States, with the notable exception of New York.
Various risks
Coinbase It has also outlined some possible risks associated with cryptocurrency-backed loans.
These loans have variable interest rates, meaning market conditions could affect borrowing costs.
Additionally, the exchange has flagged the risk of collateral liquidation. If the value of collateral assets drops significantly, users may need to add more funds. They could also end up selling their assets to cover the loan.
