Coinbase Turns DeFi Into a Consumer Playground With 10.8% USDC Yields

Coinbase has introduced a new USDC lending feature powered by Morpho, marking a significant expansion of its onchain financial services. The platform now allows users to earn yields of up to 10.8% by lending their USDC directly through the Coinbase application. The service, which leverages Morpho’s decentralized lending protocol, routes user deposits into optimized lending pools managed by Steakhouse Financial across Coinbase’s Base layer-2 network. This integration aims to provide competitive returns while maintaining the familiar security and user experience that Coinbase users expect.

The new offering operates via a smart contract-based system, enabling users to deposit USDC into Morpho Vaults, which are actively managed to allocate liquidity across multiple markets. These vaults, curated by Steakhouse Financial, help optimize returns by dynamically adjusting capital distribution based on market conditions. Users benefit from automatic interest accrual and the ability to withdraw their funds at any time, without lock-up periods. This flexibility, combined with the platform’s high yield potential, is designed to appeal to both casual and institutional users seeking to maximize the utility of their digital assets.

This development is part of Coinbase’s broader strategy to expand its onchain financial ecosystem. In addition to the new lending feature, the exchange has previously introduced crypto-backed loans, allowing users to take out USDC loans against their Bitcoin holdings, also powered by Morpho. Together, these products form the foundation of what Coinbase envisions as a "complete onchain lending and borrowing ecosystem," positioning itself as a one-stop platform for users to engage in a wide range of financial activities. The integration also underscores Coinbase’s ambition to become the "everything exchange," offering a comprehensive suite of services that cater to both traditional and decentralized finance needs.

The launch of this service is notable for its scale and the broader implications it has for the adoption of DeFi infrastructure in mainstream finance. As one of the largest consumer-facing integrations of DeFi protocols to date, this partnership between Coinbase and Morpho highlights the growing convergence between fintech and decentralized finance. The model—what Morpho refers to as the "DeFi Mullet"—combines a traditional fintech-like user interface with institutional-grade DeFi infrastructure in the backend. This approach not only simplifies access to complex financial tools but also enhances scalability and efficiency, enabling platforms like Coinbase to offer sophisticated financial services to a global user base.

The USDC lending feature will initially roll out to customers in the U.S. (excluding New York), Bermuda, and other jurisdictions, including regions such as China Hong Kong, the United Arab Emirates, and South Korea. This phased expansion reflects Coinbase’s cautious approach to regulatory compliance while ensuring a broad user base can benefit from the service. USDC, a stablecoin pegged 1:1 to the U.S. dollar, already offers users a baseline passive yield of 4.1%, with Coinbase One members earning 4.5%. The new lending feature significantly enhances these returns, aligning with the growing demand for high-yield opportunities in the digital asset space.

This move also reflects the broader trend of DeFi adoption in mainstream financial platforms. As DeFi protocols continue to mature and gain institutional backing, they are increasingly being integrated into the offerings of traditional and hybrid financial institutions. Coinbase’s collaboration with Morpho exemplifies how DeFi can be leveraged to deliver sophisticated, user-friendly financial products at scale. The company’s strategic alignment with open DeFi infrastructure positions it to lead in a rapidly evolving financial landscape where trust, transparency, and efficiency are becoming paramount.