Global Coinbase users from over 70 countries can now access decentralised finance and earn while depositing Dai.
Leading US cryptocurrency exchange Coinbase has launched a product that allows users to deposit Dai (stablecoin pegged to the US dollar) and earn DeFi. This feature is available to customers in over 70 countries, including the UK, Germany and Spain, and does not require any fees. However, the service is not currently available to Americans.
Coinbase enters the DeFi space
The trading platform announced the news via a blog post on its official website. The team praised Decentralised Finance (DeFi) as a sector with many use cases for blockchain technology and cryptocurrencies. The company noted that it enables people to access digital asset applications without the need for a centralised intermediary.
However, DeFi protocols often require high network fees and a proper user experience. With this in mind, Coinbase aims to make DeFi more accessible to its global customers:
“Eligible users will now be able to access DeFi’s attractive returns from the convenience of their Coinbase account with just a few taps and no network fees,” – the company revealed.
From December 9, customers will be able to earn Dai on DeFi. The Dai amount will then be deposited into Compound Finance (the DeFi marketplace used by crypto investors to borrow digital assets).
The annual percentage yield (APY) offered varies depending on the rates from Compound. In October, for example, it ranged between 2.83% and 5.39%.
Coinbase warned that these higher rates result in increased risk when dealing with DeFi. Although the company assured that it is closely monitoring the process, potential losses are still possible.
The trading venue said that even after a deposit has been made in the relationship, Dai remains available to customers at all times, meaning they can trade as usual. Coinbase also covers the gas fees that are typically required to access DeFi protocols.
The company said that this feature is “just the beginning”, assuring that it will provide more DeFi capabilities for its users in the future:
“Today’s launch is just the beginning – we continue to explore ways to enable a wider range of resources and more DeFi protocols for our customers.”
Coinbase and pressure from the SEC
A few months ago, the US-based cryptocurrency platform revealed its intention to launch a USDC APY lending programme in the US only. Coinbase also encouraged users to pre-register for the programme, which attracted hundreds of thousands of customers.
However, at the end of September, the team scrapped plans to launch the service, citing regulatory issues with the US Securities and Exchange Commission as the reason:
“Our goal is to create great products for our customers and advance our mission to increase economic freedom around the world,” – the update reads. “As we continue our work to achieve regulatory clarity for the entire crypto industry, we have made the difficult decision not to launch the USDC APY.”
14/12/2021 – Mr.Advice NEWS