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DeFi

PayPal partners with Spark to expand PYUSD liquidity in DeFi
Crypto Trends

PayPal partners with Spark to expand PYUSD liquidity in DeFi

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PayPal has partnered with decentralized finance (DeFi) protocol Spark to expand liquidity for its US dollar stablecoin, PayPal USD (PYUSD). 

PayPal’s stablecoin has attracted more than $135 million in deposits since its August listing on SparkLend, a lending market focused on stablecoins, according to a Thursday statement.

SparkLend was launched in 2023 out of the MakerDAO ecosystem and later integrated into Maker’s successor entity, Sky. It runs the Spark Liquidity Layer, which is backed by more than $8 billion in stablecoin reserves, according to the protocol.

Staked stablecoins on Sparklend protocol. Source: DeFiLlama

Sam MacPherson, co-founder and CEO of Phoenix Labs, a core contributor to Spark, told Cointelegraph that PayPal chose Spark because it “is the only at-scale DeFi protocol that can actively deploy capital into other protocols.” He added:

“DeFi will be the rails for all finance in the future, so focusing on that makes a lot of sense as there is massive growth potential.”

Spark is a non-custodial lending protocol where users deposit stablecoins into Spark Savings and receive non-rebasing yield tokens. According to Messari, these tokens maintain a fixed balance but grow in value over time, with yields set by Sky governance and funded through protocol revenues.

PYUSD was added to SparkLend after passing the protocol’s risk assessments.  

Related: Aave, Sky float partnership to bridge DeFi, TradFi

Stablecoin market nears $300 billion

With Europe’s Markets in Crypto-Assets Regulation (MiCA) taking effect in January and US passage of stablecoin regulation with the Genius Act in July, the stablecoin market has been surging.

DefiLlama data shows the stablecoin market capitalization is nearing $300 billion, up over $90 billion since the start of the year.

Total Stablecoins Market Cap. Source: DefiLlama

Overall stablecoin growth has been matched by rising demand for yield-bearing stablecoins. Ethena’s USDe and Sky’s USDS have seen strong momentum, with USDe’s supply growing 70% and USDS expanding by 23% since July 18, when the Genius Act was signed into law.

In August, Coinbase revived its Stablecoin Bootstrap Fund to inject liquidity for USDC across DeFi platforms, including Aave and Morpho — though the exchange did not disclose the size of the fund.

A Binance Research report shared with Cointelegraph in September noted that as stablecoin adoption accelerates, “DeFi lending protocols are increasingly positioned to facilitate institutional participation.”

DeFi lending markets expanded by more than 70% year to date in September, with institutional demand cited as a key driver.

DeFi lending protocols, TVL, year-to-date chart. Source: Binance Research

The shift toward stablecoins that generate yield has been described as “stablecoin 2.0.” While “first-generation” tokens like Tether’s USDt (USDT) focused on digitizing the US dollar and putting it onchain, a “second generation” of stablecoins is seeking to create new utility by generating yield alongside liquidity.

Magazine: How Ethereum treasury companies could spark ‘DeFi Summer 2.0’



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BNB chain gets Griffin AI tool for chat-controlled DeFi
Crypto Trends

BNB chain gets Griffin AI tool for chat-controlled DeFi

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Griffin AI has launched a tool that allows users to execute DeFi transactions using natural language commands.

Summary

  • Griffin AI launches Transaction Execution Agent, enabling users to interact with DeFi in natural language
  • The agent will work on BNB and be able to interact with DeFi platforms such as Pancakeswap

DeFi has long suffered from an accessibility issue, especially for new users. However, AI could be a potential solution. On Tuesday, Sept. 23, Griffin AI announced the launch of its Transaction Execution Agent Turbo on the BNB chain.

The AI agent will enable users to interact with DeFi platforms and wallets through natural language commands. For instance, users will be able to ask the agent to “swap 30% stablecoin to BNB,” or “earn yield on idle USDT,” among other commands. The agent will then produce smart contracts that are ready for the user to review and sign.

At its launch, the model will enable token swaps through platforms like PancakeSwap and 1inch, lending and earning on Aave v3, wallet integrations and transfers, and portfolio information.

Griffin AI tackles complexity on BNB

Critically, the model defaults to deterministic logic whenever possible, only utilizing large language models for ambiguous inputs. This ensures that the agent minimizes the risks of LLM hallucinations, which can lead to financial losses when used in the DeFi context.

“BNB Chain has the reach and cost profile for mainstream DeFi adoption,” said Oliver Feldmeier, Founder & CEO of Griffin AI. “But for many, the space is still too complex, full of tabs and the constant fear of a misclick. TEA Turbo changes that. It meets users where they already are, transforming fragmented workflows into a single, intuitive chat interface, so they can navigate DeFi with simplicity and confidence.”

Griffin AI’s TEA Turbo model also operates on a self-custodial model, which safeguards users from counterparty risks and hacking attacks.



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XRP
NFT Gaming

XRP And DeFi: The Roadmap That Tells It All

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Trusted Editorial content, reviewed by leading industry experts and seasoned editors. Ad Disclosure

Ripple has unveiled the next phase of its roadmap for the XRP Ledger (XRPL) in relation to institutional DeFi. The roadmap focuses on tokenization, privacy, and native lending, and plans to introduce more stablecoins on the network, which is a positive for XRP’s utility. 

Ripple Reveals Latest Roadmap For Institutional DeFi On The Ledger

In a blog post, Ripple noted that tokenization remains the central enabler of the XRP Ledger’s institutional strategy. Therefore, plans are in place to introduce the Multi-Purpose Token (MPT) standard by October on the network. The crypto firm explained that these MPTs are a flexible token standard that can carry essential metadata without relying on complex smart contracts. 

In relation to institutional DeFi on the XRP Ledger, Ripple noted that the MPT enables assets of bond issuers, money market funds, and structured products to be represented faithfully and traded natively on the network. The crypto firm further revealed that the next phase will enable the integration of MPTs into the DEX for easy trading, AMM liquidity pools, and cross-token payments. 

Furthermore, Ripple also plans to introduce a native lending protocol on the Ledger, which it described as the “most significant near-term milestone.” The lending protocol is set to go live in XRPL Version 3.0.0 later this year. The crypto firm said that the protocol introduces pooled lending and underwritten credit directly at the ledger level. 

Ripple remarked that the appeal of a native lending protocol on the Ledger is clear for institutions. The firm claimed that no financial institution will turn down low-cost capital if it can be sourced within KYC/AML standards. 

The protocol will pool liquidity from a global base of smaller investors into institutional-sized loans while maintaining compliance. For loan managers, this will be an opportunity to meet the rising demand for liquidity from TradFi by tapping into the growing crypto liquidity, specifically on the XRP Ledger. 

The Push For Programmable Privacy

Ripple revealed that one of the XRP Ledger’s next major upgrades is programmable privacy. The firm noted that for financial institutions, full transparency doesn’t always work, but that privacy features must still meet compliance and auditability standards. The first privacy-focused application, confidential MPTs, is said to already be in development and is scheduled to launch in the first quarter of next year. 

These confidential MPTs will support privacy-preserving collateral management, which Ripple noted is a critical requirement for institutional adoption of tokenized finance. As a whole, the crypto firm indicated that the goal is to introduce more stablecoins, RWAs, lending, compliance tooling, and privacy directly at the protocol level at a global scale. Meanwhile, Ripple stated that over the last year, the Ledger has broken into the top 10 chains for RWAs and has reached its first $1 billion month in stablecoin volume. 

At the time of writing, the XRP price is trading at around $2.84, down in the last 24 hours, according to data from CoinMarketCap.

XRP trading at $2.87 on the 1D chart | Source: XRPUSDT on Tradingview.com

Featured image from iStock, chart from Tradingview.com

Editorial Process for bitcoinist is centered on delivering thoroughly researched, accurate, and unbiased content. We uphold strict sourcing standards, and each page undergoes diligent review by our team of top technology experts and seasoned editors. This process ensures the integrity, relevance, and value of our content for our readers.



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Flare debuts FXRP, unlocking new utility for XRP in DeFi
GameFi Guides

Flare debuts FXRP, unlocking new utility for XRP in DeFi

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Flare has activated FXRP on its mainnet, allowing XRP to be wrapped and deployed across decentralized finance protocols. The rollout begins with capped minting and incentive pools, marking what Flare calls the start of an “XRP DeFi awakening.”

Summary

  • Flare has officially activated FXRP on its mainnet, allowing XRP holders to mint a fully composable, non-custodial version of the token for use across DeFi protocols.
  • The rollout, capped at 5 million FXRP in its first week, pairs liquidity incentives with a carefully measured launch, positioning FXRP as the backbone of Flare’s FAssets ecosystem.
  • Beyond simply wrapping XRP, the project envisions FXRP powering lending, stablecoin minting, and yield-generating products, laying the foundation for what Flare calls the “XRPFi flywheel” and signaling a broader push to bring major assets like Bitcoin and Dogecoin into its DeFi stack.

According to a Sept. 24 announcement, the Layer 1 blockchain has launched the first live instance of its FAssets protocol with FXRP v1.2. This enables XRP holders to mint a wrapped, composable version of the asset on the Flare network.

Flare said the initial rollout is deliberately measured, with a minting cap of 5 million FXRP in the first week to ensure network stability. To bootstrap liquidity, the Flare Foundation is directing rFLR token incentives to key decentralized exchange pools, including on SparkDEX and BlazeSwap, with target annual percentage rates for some pools reaching 50%.

How FXRP brings XRP into DeFi’s core

For XRP holders, the primary gateway to this new functionality is through the direct minting of FXRP. The process requires moving XRP to a self-custody wallet like Bifrost or Ledger that supports both the XRP Ledger and Flare.

From there, Flare said users can interact with designated minting agents to create a one-to-one representation of their XRP on the network. The team emphasized that this method is intentionally non-custodial, contrasting with previous wrapped versions that relied on centralized entities.

“They are one-to-one representations of the original asset (e.g. XRP to FXRP) secured through an overcollateralized system of independent agents and secured by Flare’s enshrined data protocols,” the team wrote.

Flare positions FXRP as a game-changer not merely because of the native composability it grants XRP. Unlike isolated bridges, the wrapped asset is designed as a foundational layer within Flare’s DeFi stack. This means that once minted, it can be seamlessly integrated as collateral for lending on protocols like Enosys Loans, used to mint an XRP-backed stablecoin, or supplied to liquidity pools without requiring custom integrations.

The upcoming launch of liquid-staked XRP, stXRP, is poised to further accelerate this by creating a yield-bearing derivative that can power a broader range of financial products, forming what the project terms the “XRPFi flywheel.”

The successful deployment of FXRP serves as proof of concept for Flare’s broader ambitions. According to its public roadmap, the FAssets system is designed to accommodate other significant non-smart contract assets, with Bitcoin and Dogecoin identified as the next in line for integration.

Flare’s native token, FLR, reflected the heightened attention. Data from CoinMarketCap showed FLR, which currently holds a market capitalization of approximately $1.9 billion, trading near $0.027 and registering a price increase of nearly 13% in the 24 hours following the announcement.



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$180 Billion XRP Faces Its Biggest Upgrade Yet With New Ripple DeFi Roadmap
Crypto Trends

$180 Billion XRP Faces Its Biggest Upgrade Yet With New Ripple DeFi Roadmap

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Ripple’s new roadmap makes it clear that XRP, already valued at $180 billion, is being promoted as an institutional DeFi asset at a time when the sector is demonstrating its true size: $161.8 billion is locked in protocols, $292.8 billion in stablecoins, $15.6 billion is traded daily on DEXes and there is $23 billion in perpetuals volume, according to DefiLlama. 

The message is clear: XRPL is evolving beyond payments to encompass the compliance, credit and tokenized markets, where billions are already changing hands daily.

1/ Institutional DeFi is here and the XRP Ledger has solidified its position as the trusted open source settlement layer for global institutions.

The next phase of the roadmap starts now. Explore it below and read the full blog for details 🧵⬇️ https://t.co/YLQ9Po8xMQ

— RippleX (@RippleXDev) September 22, 2025

Upgrades are now live, with on-chain proof of regulatory status, freeze controls for issuers and simulation tools for reducing errors. These features address regulators’ concerns, contributing to the growth of XRPL’s stablecoin, which recently surpassed $1 billion in a single month, and its position in the top 10 real-world asset chains, valued at $15.6 billion in DeFi. XRP’s role as a settlement asset within this system continues to expand.

Source: DefiLlama

The bigger shift will come with version 3.0. A protocol-level lending system will pool liquidity and issue loans natively under KYC/AML standards, creating cheaper institutional credit and direct yield opportunities. The Multi-Purpose Token standard, due in October, will allow bonds and structured products to be issued and traded directly on XRPL. 

Bottom line

These are not side experiments but are ways of pulling regulated money into markets where XRP is both the collateral and the liquidity rail.

Privacy is next. Zero-knowledge proofs are being developed to enable institutions to transact and collateralize positions without revealing details while still passing audits.

In a market where ETFs are pulling in inflows of $270 million in a single day and stablecoins are approaching $300 billion, Ripple’s plan signals that XRP is not just surviving but is being positioned to sit at the heart of the largest flows in digital finance.





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Ethereum’s next era? Low-risk DeFi is like Google: Buterin
Crypto Trends

Ethereum’s next era? Low-risk DeFi is like Google: Buterin

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Ethereum co-founder Vitalik Buterin sees low-risk DeFi as the platform’s core economic driver, likening its role to search advertising for Google.

Summary

  • Vitalik Buterin says low-risk DeFi could become Ethereum’s key economic backbone.
  • He compares it to how Google’s ad revenue sustains its growth and global dominance.
  • Buterin stresses secure apps like lending, savings, and payments as ETH’s foundation.

DeFi maturation creates sustainable Ethereum revenue model

In a recent blog post, Buterin argued that basic financial services like payments, savings, and collateralized lending can bridge the gap between profitable applications and Ethereum’s (ETH) founding values.

Buterin noted that DeFi protocols have matured substantially, with a stable core of applications proving remarkably strong over time.

He stated that low-risk DeFi provides irreplaceable value and also remains culturally aligned with Ethereum’s decentralized goals.

The shift toward low-risk DeFi shows the overall changes in protocol security and risk management. Buterin pointed to data showing DeFi losses increasingly concentrated at experimental edges of the ecosystem. He also added that core applications show growing stability and user trust.

Unlike earlier DeFi waves driven by unsustainable yield farming incentives, current low-risk applications focus on fundamental financial needs.

These include stablecoin deposits earning competitive rates on platforms like Aave, synthetic asset exposure, and fully collateralized lending markets that serve real economic demand.

Buterin argued that crypto’s advantage lies not in creating artificially high yields, but in making existing global economic opportunities accessible without traditional finance barriers.

Buterin describes several potential paths for low-risk DeFi

Buterin described several potential paths for low-risk DeFi that could expand its impact and economic value. These include reputation-based undercollateralized lending once mature onchain activity creates reliable identity and credit scoring mechanisms.

Prediction markets could integrate with traditional DeFi for hedging strategies that allow users to offset portfolio risks through betting against correlated events.

This cross-pollination between prediction platforms and financial markets could create new risk management tools.

Buterin mentioned that the ecosystem could also move beyond USD-centric applications toward alternative stable value systems like basket currencies, consumer price index-based “flatcoins,” and personal tokens.

He also emphasized that these developments would maintain Ethereum’s cultural alignment and help expand economic utility.



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CRYPTO FALLS, STOCKS HIT ANOTHER ATH, SOL DEFI COINS SOAR
Crypto Trends

CRYPTO FALLS, STOCKS HIT ANOTHER ATH, SOL DEFI COINS SOAR

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CRYPTO FALLS, STOCKS HIT ANOTHER ATH, SOL DEFI COINS SOAR

AVAX & NEAR lead L1s, most alts fall. XRP, DOGE ETF debut, $50m day 1 combined volume. MetaMask token coming ‘very soon’. Michigan BTC bill moves forward after delay. Brera Holdings launches $300m SOL DAT. ETH Fusaka upgrade scheduled for December. Plasma TGE set for 25 September. Circle facing intense competition: JP Morgan. PYUSD expands to Tron, Aave and other blockchains. Avantis adds top tech stocks on chain, allows 25x lev. ASTER keeps rising, hits $3.8n FDV. ASTER hits $310m spot volume on TGE launch. BTC trading firm CEO pleads guilty to $200m ponzi. Canada seizes $40m crypto from TradeOgre.



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Low Risk DeFi Could Drive Ethereum Fees While Keeping Values Aligned
Crypto Trends

Low Risk DeFi Could Drive Ethereum Fees While Keeping Values Aligned

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Ethereum co-founder Vitalik Buterin said revenue from low-risk decentralized finance protocols could give the network economic stability — much like Google Search supports Google — while letting nonfinancial apps uphold Ethereum’s cultural values.

Low-risk DeFi could address “important tensions” in the Ethereum community over whether apps that bring in enough revenue to economically sustain the ecosystem align with the cultural and ethical values that brought people to Ethereum in the first place, Buterin said in a blog post on Saturday.

The former has been a combination of nonfungible tokens, memecoins, and speculative trading, while the nonfinancial and semifinancial apps that reflect Ethereum’s cultural values have either struggled to gain widespread adoption or haven’t generated enough fees, he said.

“This disjointness created a lot of dissonance in the community,” Buterin said, before making his case for low-risk DeFi being Ethereum’s main fee generator. One example Buterin highlighted was deposit rates for stablecoin lending on DeFi protocol Aave, which hover around 5% for blue-chips like Tether (USDT) and USDC (USDC) and above 10% for higher risk stables.

Similarly, Buterin noted that Google does many “interesting and valuable things” — such as its Chromium family of browsers, Pixel phones, its open-source AI Gemini models, and more — but the revenue they make from those products is a fraction compared to what it makes through search and advertisements. 

It comes as the total value locked on Ethereum DeFi recently surpassed $100 billion for the first time since early 2022. DeFi TVL tanked massively across the ecosystem during the 2022-2023 bear market, and TVL figures have largely trailed the performance of top layer 1 tokens this bull market.

Source: Djani

Related: Ethereum is the ‘biggest macro trade’ for next 10-15 years: Fundstrat

However, DeFi has picked up lately amid an increase in regulatory momentum, particularly the Digital Asset Market Clarity Act, which is tipped to push DeFi adoption even further. A recent survey from the DeFi Education Fund found that over 40% of Americans are open to DeFi if stronger laws are put in place.

Ethereum has the potential to “do much better” than Google

Ethereum has the potential to “do much better” than Google due to its decentralization. Unlike Google, Ethereum’s decentralized structure better positions low-risk DeFi to align financial success with ethical outcomes, creating harmony between “doing well” and “being good.”

“The revenue generator does not have to be the most revolutionary or exciting application of Ethereum. But it does need to be something that is at least not actively unethical or not embarrassing.”

Buterin criticized Google’s incentive model, noting that advertising revenue pushes the company to hoard user data, conflicting with its original open-source and positive-sum ethos.

Vitalik advocates for basket currencies, flatcoins 

While low-risk DeFi is often about enabling easier access to the US dollar — particularly those in low-income and high-inflation countries — Buterin would like to see other innovations that provide economic support to Ethereum.

Buterin pitched the idea of building cryptoassets that track a basket of currencies and flatcoins that are based directly on consumer price indices.

Magazine: Astrology could make you a better crypto trader: It has been foretold



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Is US crypto regulation favoring CeFi over DeFi?
Crypto Trends

Is US crypto regulation favoring CeFi over DeFi?

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Once heralded as a disruptive alternative to traditional finance, the DeFi (decentralized finance) sector now faces competition from CeFi (centralized finance)—a hybrid model that blends crypto’s financial rewards with the familiar convenience of centralized platforms.

Summary

  • While the current administration is not suppressing decentralized platforms, it doesn’t focus on this space either.
  • The CLARITY Act is set to clarify the legal status of cryptocurrencies. The crypto community members shared the principles of decentralization that should be included in the bill.
  • There is a risk that centralized companies will disguise themselves as decentralized to benefit from the “innovator exempt.”

While much is said about the support of the Trump Administration for the crypto sector in general, tech attorney Alexander Urbelis and other experts believe that the U.S. regulators favor CeFi over DeFi.

But Urbelis warns that the U.S. regulators’ leaning toward facilitating centralized crypto businesses creates dangers. His concerns were outlined in the Unchained media article on Sept. 17.

Generally, U.S. regulators are more focused on platforms and products that comply with anti-money laundering (AML) laws and collect user data.

What’s the difference between DeFi and CeFi?

While DeFi and CeFi platforms offer similar services—like cryptocurrency exchange and yield farming—the key difference lies in control.

Blockchain Association co-founder Connor Spelliscy outlines seven principles of decentralization, developed with input from over 40 industry experts:

  • Open: The source code should be available to the public.
  • Autonomous: The network should be controlled by the encoded rules without human intervention.
  • Permissionless: No one can restrict the use of the network for others unilaterally.
  • Non-Custodial: The platform doesn’t store private keys of its users. Only users themselves are in charge of keeping their keys and private data.
  • Distributed: No person or group of people can perform changes to the network unilaterally, nor can they control large portions of the token supply.
  • Credibly Neutral: The code doesn’t provide anyone with the network privileges over other users.
  • Economically Independent: The network mechanisms facilitate the token value growth.

These principles stand in stark contrast to the approach of U.S. policymakers, particularly in the CLARITY Act, which may allow companies to self-certify as decentralized.

This could lead to discrepancies in how decentralization is defined, allowing centralized platforms to exploit the benefits meant for true DeFi projects.

Spelliscy warns that without clear definitions, opportunistic companies may pass themselves off as DeFi while enjoying the regulatory advantages intended for innovators.

Does the U.S. crypto regulation favor CeFi over DeFi?

The CLARITY Act aims to define the legal status of cryptocurrencies, but it’s still unclear whether decentralized projects will thrive under the current administration.

While regulators have paused legal actions against major CeFi players like Circle, Binance, and Coinbase, they’ve taken a harsher stance on DeFi developers such as those behind Samourai Wallet and Tornado Cash, who face prison for creating privacy tools.

The $USDH debate is one of the more interesting events in recent crypto memory — a case where US policy (the GENIUS Act) is crucial to a major design decision.

I have no vote, but I do see some misunderstanding about GENIUS worth clarifying. A few points to consider for those…

— Jake Chervinsky (@jchervinsky) September 10, 2025

The passage of the GENIUS Act in 2025, which sets the framework for stablecoin issuers, is seen as a step forward. However, critics argue it only lays the groundwork for further regulation. While stablecoins serve as a key entry point to DeFi, the U.S. government’s oversight—requiring issuers to obtain permission and collect user data—undermines decentralization.

In sum, the Trump administration doesn’t actively target decentralized platforms, but it clearly seems to favor CeFi over DeFi.





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GameFi Guides

Temporary ‘Boost’ from DeFi Lender Morpho Behind Elevated USDC Lending Rates for Coinbase Users

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In brief

  • Coinbase unveiled a lending product this week offering “competitive yields.”
  • DeFi lender Morpho is currently subsidizing those rates.
  • A Coinbase employee acknowledged that it’s a marketing tactic.

A lending product unveiled by Coinbase that offers up to 10.8% returns on USDC deposits is receiving a temporary boost from DeFi lender Morpho.

On X, Coinbase Head of Consumer and Business Products Max Branzburg said on Thursday that around 6% of the product’s returns stem from activity that takes place on Morpho’s platform, while an additional 5% is being “boosted” by the protocol itself.

In a statement to Decrypt, a Coinbase spokesperson confirmed that Morpho is currently augmenting the lending product’s returns, but it declined to say whether the arrangement was the product of a deal, or when the effective subsidy could end.

“While the interest rate always fluctuates and will climb or dip naturally over time, the current yield is elevated by the Morpho boost,” they said. “Morpho frequently deploys incentives to drive activity in their ecosystem, and this is part of that broader motion.”

Decrypt has reached out to Morpho for comment.

When Coinbase unveiled the lending product on Thursday, many people wondered where its competitive yields came from, whether through memes or posing the question directly. The intrigue, in many ways, is the product of contagion among crypto lenders in 2022.

The advertised return for Coinbase’s product is not nearly as eye-popping as the 20% returns once offered by Anchor Protocol before Terra’s ecosystem went belly up in 2022. As companies like Coinbase lean into on-chain lending products under crypto-friendly lenders, the pause among some onlookers indicates bad memories haven’t been entirely forgotten.

A blog post introducing Coinbase’s new lending product makes no mention of Morpho’s subsidy, which Branzburg acknowledged is for marketing purposes on X. A Coinbase spokesperson noted that the exchange has a help page explaining that Morpho’s lending rates can vary.

Morpho, which exists on Ethereum and Coinbase’s layer-2 scaling network Base, allows users to create markets for overcollateralized loans that are separate and customizable. For its product, Coinbase said that a firm called Steakhouse Financial is curating the “vaults” that users deposit funds into, or managing risk and allocating USDC to different markets.

Decrypt has reached out to Steakhouse for comment.

The only vault on Morpho tied to Stakehouse that exists Base had $24 million in USDC deposits on Friday, according to Morpho’s website. The vault offered an annual percentage yield of 5.87%, and is currently collecting a 25% performance fee.

The vault’s funds were supplied to markets for borrowing wrapped versions of Bitcoin and Ethereum, including Coinbase’s cbBTC and cbETH products, as well as WETH and wstETH. Over 98% percent of the vault’s funds were dedicated to the market for lending cbBTC.

The Coinbase spokesperson confirmed to Decrypt that the vault is tied to its product.



In a blog post, Morpho said Coinbase’s lending product dovetails with the exchange’s second rollout of crypto-backed loans earlier this year, which are also powered by the DeFi lender. (Coinbase stopped issuing crypto-backed loans under its Borrow service in May 2023, not long after receiving an enforcement threat from the SEC.)

“The two offerings complement each other perfectly: lenders provide liquidity that directly fuels crypto-backed loans,” Morpho said.

Coinbase users can already earn passive rewards on USDC held within their accounts, topping out at 4.5% APY for customers of its subscription-based membership. The dollar-pegged token is backed by cash and U.S. Treasuries, like most other stablecoins.

Several banking groups have called stablecoin rewards a “loophole” under legislation that was recently passed in the U.S., demanding that it be changed. Yet others see the prospect of yields as important for stablecoins to see adoption amid a competitive market.

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