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Coinbase is shaking things up.
Somehow if you haven't heard, Morpho and Coinbase have teamed up to offer loans where Coinbase users can (although, to the disappointment of some of my colleagues, Coinbase users can't) borrow USDC against Bitcoin held on Coinbase. Cool, isn't it? Definitely another sign on Changing times.
Blockworks data expert Dan Smith joined Empire tour this weekHe told host Jason Yanowitz that he believes the announcement is a win for Bitcoin... with some caveats.
“Bitcoin money, they want (Coinbase) to be everywhere,” Smith said. But the asterisk, as he called it, is that the lender now has to trust Morpho's ability to hold bitcoin as collateral on Base. This can cause anxiety about something going wrong.
As Smith pointed out, the upside is that Coinbase is the largest centralized exchange in the US.
For some people, this will be enough to mandate that Morpho and Coinbase hold the loaned Bitcoin.
There has been huge demand for the product, according to Coinbase's vice president of product, Max Bransborg.
Smith also noted in the episode that the pairing of cross-chain lending startups Morpho and Coinbase here represents a big win for the former.
For Branzburg and Coinbase, Morpho was the perfect solution because they "have built some really great products in this space, and they've built protocols that are very well vetted that are safe and secure (and) provide that kind of value."
But he does not rule out the possibility of integration with other projects.
“As more people build on the base, we will find ways to bring Coinbase users to these builders,” Branzburg said.
Honestly, one of my burning questions personally was two-fold, why Bitcoin, and will this be a Bitcoin-only offering?
A few weeks ago, when I spoke with Haynes Boone partner Matthew Frankel, we discussed the growing desire for margin loans in Bitcoin (which unfortunately didn't pan out). Its way to this bulletin…yet). And now we have this big partnership announcement from Coinbase.
Branzburg's simple answer to the first part is that Bitcoin is "OG". It actually follows the same formula that Coinbase used when it announced its Bitcoin Wrapped product last year, which allowed people to leverage their exposure to Bitcoin on Base.
“This was a great accomplishment a few months ago, but you still have to take your bitcoin, put it in your wallet, navigate through the protocols, and figure out how to use it,” he explained. “What happens here is we do all that for you, and we remove all that complexity.” .
Essentially, it gives customers potential added value to their Bitcoin (and prevents it from turning to dust, of course).
Anyway, the last piece of information I gathered is that Bitcoin is just beginning on-chain lending via Coinbase.
“This roadmap will expand to include other assets over time as well,” Branzburg told me.
So there you have it guys, Coinbase is going even further, and perhaps just in time for cryptocurrencies to have their moment in the spotlight.
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