A compliant platform has launched an ETH-collateralized loan service, expanding DeFi credit access and liquidity.

Source: DefiPlanet Original Title: Coinbase Launches ETH-Backed Loans, Expands DeFi Credit Access and Liquidity Original Link: https://defi-planet.com/2025/11/coinbase-launches-eth-backed-loans-expands-defi-credit-access-and-liquidity/

Quick Highlights

• A compliant platform has launched a new lending service that allows eligible US users to use their Ethereum (ETH) holdings as collateral to obtain USDC loans of up to $1 million.
• The product is powered by the Morpho lending protocol, operating on the platform’s Base Layer-2 network, combining the advantages of DeFi liquidity with a centralized interface.
• The program enables borrowers to maintain their ETH exposure without triggering taxable events from sales, and provides automatic liquidation protection at an 86% loan-to-value ratio.

ETH-Backed Loan Service

A compliant platform has introduced a new Ethereum-backed loan service, enabling eligible US customers (excluding New York due to regulatory reasons) to borrow up to $1 million in USDC by using Ethereum as collateral. Users can access liquidity without selling ETH, thus retaining ownership of their assets and avoiding taxable events typically associated with sales.

The service operates on Morpho, a decentralized lending protocol built on Base (the platform’s Ethereum Layer 2). This results in a combination of on-chain security with the ease of a familiar centralized platform.

Expanding DeFi Integration and Market Coverage

This lending product marks one of the platform’s most significant decentralized finance integrations, following the previous launch of Bitcoin-backed loans (recently increased to $5 million). On-chain lending within the Base ecosystem has exceeded $1.25 billion, reflecting growing institutional and retail demand for flexible credit solutions that allow users to retain crypto assets. The platform is strategically adding ETH-backed loans to complement the ongoing growth of crypto-native credit, offering loans with no liquidation risk for positions maintained below an 86% loan-to-value ratio. Plans include support for other assets, such as cbETH (the platform’s staked ETH derivative), to further expand borrowing options.

The platform is reportedly working with Kalshi (a regulated operator) to develop a prediction market platform. Screenshots show a platform-branded interface for using USDC or USD to make predictions on real-world events (politics, sports, science, economics). This move aligns with other major crypto companies (such as Crypto.com and Gemini) also preparing similar prediction market products.