Coinbase will allow users to earn interest in crypto
Only for non-U.S. customers
The online cryptocurrency platform, Coinbase has recently announced that it will be allowing its customers to earn interest on their crypto by lending them to the decentralized finance app, Compound. The lending program is unavailable in the US but is now available to customers in over 70 countries.
The program will allow Coinbase customers to lend their Dai which is a stable coin with a value that is tied to the US dollar to any borrower from within the Coinbase app. The program works by utilizing a protocol on Compound that will electronically pool money from lenders as well as collect interests on money from the borrowers. The new program is similar to Coinbase Lend, which the cryptocurrency company announced in June but was ultimately canceled due to the SEC threatening to sue them. Coinbase Lend is a lending program that allows customers to earn interest on USDC by lending it directly to Coinbase to manage rather than through an outside protocol like Compound.
Coinbase has stated that by utilizing Compound, the lending system would be more user-friendly since it will involve receiving multiple tokens when a customer makes a deposit or pays transaction fees. The transaction fees for using the program are said to be covered by Coinbase. The company promises its customers that they would be getting whatever money they put in the lending program back but warns them that there isn't any guarantee. They also warned customers about potential losses if Coinbase customers decide to try out the lending program.
For more from us at Waivly, join our free fun-to-read and to-the-point newsletter enjoyed by hundreds of people across the internet every day of the week 👇