Coinbase makes it easy to earn yield with DeFi

By Rhea Kaw, Senior Product Manager

Today we’re introducing a new way for Coinbase’s global customers to put their crypto to work and earn yield. We are making DeFi more accessible, enabling eligible customers in more than 70 countries to access the attractive yields of DeFi from their Dai with no fees, lockups, or set-up hassle.

Decentralized Finance (DeFi) is becoming one of the most popular use cases for blockchain technology and cryptocurrencies because it enables people to access crypto applications without the need for a centralized intermediary.

However, accessing DeFi protocols can require expensive network fees and involve a somewhat complex user experience. Coinbase is making DeFi more customer friendly and accessible. Eligible users will now be able to access the attractive yields of DeFi from the comfort of their Coinbase account with just a few taps and without the network fees.

Starting today, you’ll be able to earn DeFi yield on Dai, a stablecoin that is designed to be pegged to the US Dollar.

When you opt in to earn DeFi yield, your Dai is deposited into Compound Finance, an industry-leading DeFi protocol. The offered APY varies based on the rates from Compound and will automatically update to reflect changes in the market. Compound’s rates are variable — as an example, during the month of October, the APY for supplying DAI fluctuated between 2.83% and 5.39%.

These higher rates reflect both the unique access to global liquidity and increased risk that can come with DeFi. Though Coinbase monitors these protocols regularly, we cannot guarantee against potential losses. One way that DeFi protocols endeavor to mitigate risk of loss is to use overcollateralization, which means that they hold excess assets to cover potential losses. This is a unique form of investment, so it is always best to make an informed investment decision.

Even when deposited with Compound, your Dai remains available to you on Coinbase at all times, letting you continue to trade and spend as usual. Best of all, Coinbase covers the gas fees typically required to access DeFi protocols and their variable yields.

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. Today’s launch is just the beginning — we are continuing to explore ways to allow our customers to use a wider variety of assets and a greater number of DeFi protocols.

Earning DeFi-powered yield on Dai is now available for eligible Coinbase users in over 70 countries, including the United Kingdom, Germany, and Spain. DeFi Yield is not currently available for customers in the United States. We will continue to work to bring DeFi Yield to more countries to reach more of our customers.

To get started, visit the Dai asset page in the Coinbase app or on Coinbase.com. In addition to being in an eligible jurisdiction, you must have Dai in your Coinbase wallet in order to enter the DeFi Yield experience. Once you have a Dai balance, go to the Dai asset page, choose the DeFi Yield tile to review, and accept the terms to start earning.

Coinbase makes it easy to earn yield with DeFi was originally published in The Coinbase Blog on Medium, where people are continuing the conversation by highlighting and responding to this story.