Loans run onchain via Morpho on Base, with liquidation risk if collateral drops, and some tokens are wrapped for compatibility.
Coinbase has expanded its U.S. crypto-backed lending service to cover XRP, Dogecoin, and Cardano’s ADA, alongside Litecoin. The update allows eligible customers to borrow up to $100,000 in Circle’s USDC without selling the posted assets. The company said the service is available nationwide except in New York, where financial regulations tend to be stricter.
The loans are routed on-chain through Morpho, a decentralized lending protocol. Users interact through Coinbase’s app or website, while the borrowing and collateral management occur through smart contracts. Coinbase said the structure does not rely on the exchange’s balance sheet for lending, as funds come from on-chain liquidity pools.
Borrowers post supported tokens as collateral and receive USDC after they open the position. Repayment does not follow a fixed schedule, and customers can repay at any time, provided the collateral remains above required thresholds. Coinbase also applies buffers and sends alerts as a position nears liquidation levels.
Coinbase said the lending flow runs on Base, its Ethereum layer-2 network. Because Morpho operates in Ethereum-compatible environments, some collateral is converted into wrapped versions before being used in the lending pools. The American exchange cautioned that wrapping can create tax considerations, depending on a user’s jurisdiction and personal circumstances.
The platform uses loan-to-value limits that are lower for the newly added retail-heavy tokens than for Bitcoin and Ether. For XRP, Dogecoin, ADA, and Litecoin, The exchange indicated a maximum loan-to-value of 49%, with liquidation triggered at 62.5%. If collateral prices fall and the ratio rises, a third party can repay the debt and take the collateral at a discount.
Interest rates are variable and move with market conditions within the lending pools. Coinbase also charges a one-time borrowing fee that is added to the loan balance. The company has stated that borrowed funds cannot be used for trading on the exchange, separating the lending feature from its spot and derivatives business.
The expansion comes after heightened market volatility and a wave of liquidations earlier in February. By adding XRP, Dogecoin, ADA, and Litecoin, Coinbase is broadening the set of assets that can be used to access stablecoin liquidity while maintaining exposure to the original holdings.
Coinbase has disclosed that XRP is among the larger assets held for customers on the platform. The exchange reported holding $17.2 billion in XRP as of December 31 in a regulatory filing.
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