Coinbase Launches ETH-Backed USDC Loans on Base as On-Chain Lending Tops $1.27B
Coinbase has launched ETH-backed USDC loans for eligible U.S. users on its Layer 2 network, Base. Powered by the Morpho protocol, the new DeFi offering lets borrowers use ETH collateral to secure up to $1 million in USDC without selling their holdings. These ETH-backed USDC loans are priced with variable rates, and borrowers must maintain an LTV below 86% to avoid automatic liquidation during ETH price swings.
According to Dune Analytics, Base’s on-chain lending ecosystem has processed over $1.27 billion in loans, with roughly $800 million outstanding across more than 13,300 active wallets. This move strengthens DeFi adoption on Base and enhances ETH’s utility as collateral, paving the way for increased stablecoin lending activity.
Coinbase plans to expand the product to include cbETH-backed borrowing and is leveraging recent DeFi integrations and regulatory clarity to deepen its lending services. The development underscores Coinbase’s strategy to drive DeFi growth and support stablecoin usage across its platforms.
Bullish
The launch of ETH-backed USDC loans on Base is likely bullish for ETH price. In the short term, traders may buy ETH to use as collateral, driving demand and upward price pressure. The requirement to maintain an LTV below 86% also adds a lever for margin calls, which can amplify volatility but generally supports buy‐side momentum if ETH prices rise. In the long term, expanding collateral options (including upcoming cbETH support) and growing on-chain lending volumes signal deeper DeFi adoption, reinforcing ETH’s role as a key collateral asset and underpinning sustainable demand.