Major crypto exchange Coinbase has announced that it will allow users to lend out their crypto and gain interest from loans using decentralized finance (DeFi) apps via its Coinbase Wallet app.
The development comes as the crypto lending industry continues on a path of dynamic growth, with rapidly increasing interest among would-be lenders worldwide.
In a statement, the exchange wrote,
“Coinbase Wallet users have already deposited millions of dollars into DeFi apps like Compound and dYdX, earning interest at rates ranging up to 6% [annual percentage rate]. Users currently access these apps through the Wallet’s built-in decentralized application (dapp) browser or via WalletLink on desktop. However, it isn’t easy to compare rates or view total balances across different providers.”
Coinbase added that its latest move would “make it even easier” for customers to use DeFi apps by “integrating them” into its “wallet experience.”
DeFi borrowing and lending apps typically involve making use of smart contracts, or programs that run on the Ethereum blockchain, backed by collateral from borrowers.
These borrowers are required to lock up a certain amount of crypto holdings on the blockchain network in order to borrow tokens from a would-be lender.
Last year saw a major surge in crypto lending worldwide.