• Coinbase Introduces DeFi Yield Services, But Not To Americans

  • Coinbase, the largest cryptocurrency exchange in the United States, is expanding its services with new decentralized finance (DeFi) offerings, but they will be unavailable to North American customers.

    Coinbase announced on December 9 that it was launching a new DeFi service to “eligible customers” in over 70 countries.

    For the time being, the DeFi yield product will only be available on MakerDAO’s DAI stablecoin. Those who qualify will be able to earn DAI yields directly from the Coinbase app and website, according to the company.

    In early September, the Securities and Exchange Commission threatened legal action against Coinbase over its proposed Lend service, effectively killing the company’s plans for DeFi in the United States. Lend would have allowed investors to earn interest on USDC stablecoins, but the regulator said no.

    Coinbase Chief Financial Officer Alesia Haas stated during this week’s congressional testimony that “we still do not have clarity on why our product was not allowed to proceed.”

    Compound’s DeFi yields

    Coinbase will generate DAI yields using the DeFi lending protocol Compound Finance. Annual percentage yields will vary depending on compound interest rates. According to Coinbase, the APY for supplying DAI ranged between 2.83 percent and 5.39 percent in October. Compound was offering 3.33 percent on DAI deposits at the time of writing.

    There was no mention of what fees or commission Coinbase would deduct from these yields, but it did state that it would cover the gas costs. However, the company did warn that there could be potential losses, which are unlikely due to over-collateralization.

    DeFi yields are available to users in the United Kingdom, Germany, Spain, and a number of other countries. Coinbase intends to expand its DeFi offerings in areas where such activities are not yet restricted or regulated, stating,

    Today’s launch is just the beginning; we’re still looking into ways to enable our customers to use a broader range of assets and a greater number of DeFi protocols.

    DAI supply is increasing.

    According to CoinGecko, DAI is the fourth-largest stablecoin by market capitalization, with $8.91 billion.

    DAI supply has increased 2,300% since the beginning of 2021, reaching an all-time high of just under $9 billion earlier this week.

    DAI is distinct from other stablecoins like Tether, USDC, and BUSD in that it is decentralized and backed by crypto collateral via the MakerDAO protocol.

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