MORPHO Powers Coinbase's Expanded Crypto-Backed Lending to XRP, DOGE, ADA, and LTC

• Coinbase has expanded its on-chain lending program to include XRP, DOGE, ADA, and LTC, allowing users to borrow up to $100,000 in USDC according to reports.
• The service is powered by DeFi protocol Morpho and operates on Coinbase's Base layer-2 network, providing liquidity solutions for long-term holders without selling their tokens as detailed.
• Borrowers must maintain a loan-to-value ratio of 49%, with a liquidation threshold at 62.5%, due to the higher volatility of these tokens compared to BTC and ETH according to data.

What is the significance of this lending expansion?

Coinbase's move reflects its broader strategy to diversify revenue beyond trading fees and capitalize on the growing trend of crypto-backed borrowing as reported. By offering this service, Coinbase aims to cater to a wider range of tokens with large retail followings, including ADA and DOGE, which do not have native staking yield according to analysis. This expansion aligns with the increasing institutional interest in Cardano's ecosystem, as highlighted by Grayscale's increased allocation of ADA in its Smart Contract Fund . according to reports.

What are the risks associated with this service?

One key risk is the potential for liquidation if the value of the collateralized tokens falls sharply as noted. This is due to the higher volatility of tokens like ADA, DOGE, and XRP compared to more stable assets such as Bitcoin and Ethereum. Additionally, while the service allows users to access liquidity without selling their crypto holdings, it does not allow them to trade on Coinbase with the borrowed funds according to the service terms.

How does Morpho support this initiative?

Morpho provides the infrastructure for this lending service, managing loan and collateral rules on-chain to avoid involving Coinbase's balance sheet according to technical documentation. The integration allows users to earn yields via EURCV, a MiCA-compliant stablecoin, and collateralize various cryptocurrencies for USDC loans as described. Institutional validation is also evident, as Apollo has acquired 9% of Morpho's tokens, supporting institutional-grade lending integration while maintaining compliance with decentralized governance according to transaction data.