No High DeFi Yield for US Customers, Coinbase Allows Global Users to Earn Interest on DAI via Compound
Cryptocurrency exchange Coinbase has launched a high DeFi yield product for its global users, except in the US.
“We are making DeFi more accessible, enabling eligible customers in more than 70 countries to access the attractive yields of DeFi lending on their DAI with no fees, lockups, or set-up hassle,” Coinbase said in a prepared statement.
This means Coinbase users will now be able to earn interest on their crypto holdings through decentralized finance (DeFi), starting with stablecoin DAI, which will be deposited with Compound Protocol.
“This is an important milestone for the industry, demonstrating what major on-ramps to DeFi will look like,” said Robert Leshner, founder of Compound Finance.
The interest on DAI holdings will be variable with higher rates to reflect increased risk and unique access to global liquidity, it said. The APY for supplying DAI fluctuated between 2.83% and 5.39% in October, noted the exchange.
The leading crypto exchange in the US, which went public in April this year, said through this move, they want to make DeFi more approachable and customer friendly.
While DeFi is becoming a popular use case of crypto by enabling people to access apps without a centralized intermediary, Coinbase said accessing these protocols is expensive and complex. As such, they want eligible users to access the “attractive yields” of DeFi right in their Coinbase account with just a few taps but without the network fees.
“DeFi has tremendous potential to help increase economic freedom, and we’re excited to be able to provide a trusted and accessible way to participate,” the exchange added.
US customers, however, aren’t eligible to take advantage of this opportunity. The US is exempted from this service as back in September, Coinbase CEO shared that the SEC has threatened to sue them if they launched their yield-earning product called Lend as the agency alleges it to be a security.
“There’s a lot of lending going on. There’s a lot of trading going on. And without protections, I fear that it’s going to end poorly,” SEC Chair Gary Gensler said around that time.