TheBlock
Coinbase has added fixed-rate bitcoin-backed loans through Morpho Midnight, letting users borrow USDC with an interest rate and repayment date locked in at origination. The new option sits alongside Coinbase's existing variable-rate loans built on Morpho Blue, which have grown to more than $1.4 billion outstanding against roughly $3 billion in collateral. Loans come due at the end of the current month or the end of the next month, with rates set by an onchain order book where lenders and borrowers place competing offers.
Why it matters
Morpho launched Midnight on Base in July to bring fixed rates and defined terms to onchain lending, where borrowing costs have historically floated. Coinbase is the first major consumer platform to offer Midnight loans at scale, per a Morpho spokesperson, and Midnight has around $30 million in deposits as it rolls out. The broader Morpho Blue network carries $5.2 billion in outstanding loans and $16 billion in deposits across all integrations.
If a borrower fails to repay before maturity, the lender has a claim on the posted collateral. Morpho also sees Midnight as a building block for structured credit products and loans backed by tokenized real-world assets, with more integrations expected.
Market impact
The move pushes fixed-income mechanics, a staple of traditional credit markets, into a mainstream consumer crypto app. Coinbase manages the app experience, Morpho supplies the protocol, and transactions settle on Base.
"Coinbase Borrow gives our customers access to liquidity without having to sell their assets, and fixed-rate borrowing gives them even greater choice over how they manage that credit," said Jacob Frantz, yield and investments product lead at Coinbase.
Watch Midnight's deposit base for growth beyond its current $30 million, and whether more consumer platforms follow Coinbase in adopting fixed-term onchain credit.
Frequently asked questions
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What are Coinbase's new fixed-rate bitcoin-backed loans?
Coinbase now lets users borrow USDC against bitcoin through Morpho Midnight, with the interest rate and repayment date fixed when the loan is taken out. The option runs alongside Coinbase's existing variable-rate loans built on Morpho Blue.
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How are interest rates set on Coinbase's fixed-rate loans?
Rates are set by supply and demand as lenders and borrowers place offers on an onchain order book. Coinbase declined to share the specific rates offered to borrowers.
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When do Coinbase fixed-rate loans come due?
Loans are currently due at the end of the current month or the end of the next month, with end of month defined as the last Friday. Borrowers must repay before maturity or the lender has a claim on the posted collateral.
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How big is Coinbase's crypto lending book?
Coinbase's existing variable-rate loans on Morpho Blue have grown to more than $1.4 billion outstanding, backed by roughly $3 billion in collateral. Across all integrations, the wider Morpho Blue network carries $5.2 billion in loans and $16 billion in deposits.
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What else can Morpho Midnight be used for?
Morpho says Midnight could power structured credit products and loans backed by tokenized real-world assets. More integrations are expected, though the company declined to name the firms or provide a timeline.
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