Coinbase adds fixed-rate bitcoin-backed loans through Morpho Midnight

Coinbase has added fixed-rate bitcoin-backed loans through Morpho Midnight, letting users borrow USDC with an interest rate and repayment date set when they take out the loan.

The new option sits alongside Coinbase's existing variable-rate loans, which use Morpho Blue. Those loans have grown to more than $1.4 billion outstanding, backed by roughly $3 billion in collateral, Coinbase said. Coinbase users can now choose between fixed-rate and variable-rate onchain loans.

Morpho launched Midnight on Base in July to bring fixed rates and defined loan terms to onchain lending, where borrowing rates have generally been variable.

Coinbase's use of Morpho Midnight

Coinbase is the first major consumer platform to offer loans through Midnight at scale, a Morpho spokesperson told The Block. Market makers also use the protocol, and Tenor Labs launched a lending platform using Midnight in July, the spokesperson said.

Midnight has around $30 million in deposits as it rolls out, according to the spokesperson. Morpho Blue, the company's variable-rate protocol, has $5.2 billion in outstanding loans and $16 billion in deposits across all integrations, the spokesperson said. Those figures cover the wider Morpho network, not just Coinbase.

A Coinbase spokesperson declined to share the interest rates offered to borrowers using Midnight. The rates are set by supply and demand as lenders and borrowers place offers on an onchain order book, the spokesperson said.

Coinbase currently offers loans due at the end of the current month or the end of the next month. "End of Month" means the last Friday of the month, the spokesperson said. Borrowers must repay before the maturity date; if a loan goes unpaid, the lender has a claim on the collateral posted by the borrower, they added.

"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," Jacob Frantz, yield and investments product lead at Coinbase, said in a statement.

Coinbase manages the app experience, Morpho provides the lending protocol, and transactions settle on Base.

Morpho said Midnight could also be used to create structured credit products and loans backed by tokenized real-world assets. Those are possible uses of the protocol, the Morpho spokesperson said. More integrations are expected, but the spokesperson declined to name the firms or provide a timeline.

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