Coinbase Expands Into On-Chain ETH Lending
Coinbase has introduced a new on-chain lending product that allows users to borrow against their Ethereum holdings instead of selling them. Under the new offering, eligible customers can access loans of up to $1 million in USDC, with lending powered by the Morpho protocol on the Base network.
The product is designed for users who want liquidity while maintaining exposure to ETH. Rather than liquidating crypto positions, borrowers can lock their assets as collateral and receive stablecoins, a structure that may appeal to investors seeking capital efficiency during volatile market conditions.
Collateral Setup and Risk Thresholds
At launch, loans will be backed by WETH, with Coinbase planning to transition collateral support to cbETH at a later stage. The company said the product carries a maximum loan-to-value ratio of 75%, while liquidation is triggered at 86%. These parameters mean users must monitor collateral levels closely, especially if ETH prices weaken sharply.
While a higher LTV can improve borrowing flexibility, it also increases liquidation sensitivity. For borrowers, the key trade-off is gaining access to cash without selling ETH, while managing downside risk if the collateral value drops.
Eligibility and Expansion Plans
The service is currently available to verified U.S. users, though New York State is excluded. Coinbase also said it plans to expand the product internationally over time.
The launch highlights a broader trend of centralized crypto platforms integrating more directly with DeFi infrastructure. By using Morpho on Base, Coinbase is positioning itself as a bridge between mainstream exchange users and on-chain financial services, while giving crypto holders another way to unlock liquidity from existing assets.