Coinbase takes a ton of flake from the crypto community because of its centralized structure and thus the controlling nature of it. This take though is really short-sighted as Coinbase is leading the charge to get the government to get its act together about crypto regulations and what should and should not be done. A few months ago Coinbase announced a program called Lend that would allow you to earn up to 5% APY on certain stablecoins like USDChowever the SEC threatened to sue them if they launched it so the project was shelved.
or at least we thought it was shelved...
Today Coinbase announced to the world that 70 countries were going to be able to lend their crypto to Compound without the need to transfer it. Honestly, I loved it as they thumbed their nose at the US regulators by not allowing people in the US to participate. Since Coinbase has tried meeting and talking with them they have now moved to the idea of forcing change which I have to admit I 110% agree with. People from 70 different countries now will be able to go to their DAI or USDC wallet in their Coinbase account and be able to select lending to Compound and thus get compounds variable interest rate.
Coinbase has already even said that it will be allowing other assets and possibly other DeFi protocols to be added as well! While some might not like this I really think it could be a great thing for people who are starting out to dip their toes into DeFi without a crazy risk and gas fee. One thing that I have not been able to find out about though is will these lenders be able to receive their COMP tokens. While there is not a ton of COMP being given out for those two coins it still is a huge factor to consider. I wonder if it is being liquidated and thus people are getting a boosted APY amount for their COMP.
Either way, it is a huge boost. Coinbase currently does offer 2.00% APY paid out daily for holding DAI on the platform but their USDC rate is 0.25% and really... I mean I kind of used it but with that rate of return, DAI was the much easier option to go with. Coinbase does mention that the rates offered via DeFi are subject to fluctuation and I would assume a large amount of DAI and USDC could flood Compound now because of this partnership. To me this personally cements the idea that Compound is a "blue chip" for the DeFi industry. As one of the oldest and strongest DeFi applications around Coinbase was really smart in choosing them to partner with.
Please know I am not a financial advisor I am just someone who picked up on a trend and wanted to express it! Makes sure you always do your own research and never invest money you cannot afford to lose! If you enjoyed this article and would like to further support me below are a couple of referral links that if you used when signing up I would appreciate it!
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