Coinbase announced that it has added four altcoins – XRP, Dogecoin (DOGE), Cardano (ADA), and Litecoin (LTC) – as collateral for loans.
Coinbase, the largest cryptocurrency exchange in the US, announced that it has added four altcoins – XRP, Dogecoin (DOGE), Cardano (ADA), and Litecoin (LTC) – as collateral for loans.
Accordingly, Coinbase announced that it has expanded its on-chain lending product offered through its DeFi protocol Morpho, adding XRP, DOGE, ADA, and LTC to its collateral options.
US customers, excluding those in New York State, will be able to borrow up to $100,000 in USDC without having to sell these four altcoins.
Speaking to The Block!, Coinbase product leader Jacob Frantz said, “Whatever you have, you should be able to leverage your crypto without having to sell it. Being able to borrow in exchange for more tokens means more opportunities to make your crypto work harder for you, and this is an exciting preview of a future where all kinds of tokenized assets can be used to create better financial services.”
Coinbase has launched its on-chain lending product for the first time, initially starting with Bitcoin and later expanding to Ethereum. Users can borrow up to $5 million in USDC in exchange for Bitcoin, and up to $1 million in USDC in exchange for Ethereum.
Coinbase’s on-chain loans do not have a fixed repayment schedule, but borrowers are required to maintain a loan-to-value (LTV) ratio to avoid liquidation.
At this point, borrowers can use LTV rates up to 75% for BTC and ETH loans, while facing a default risk of 86%. XRP, DOGE, ADA, and LTC loans offer LTV rates up to 49%, with a default risk of 62.5%.
