Coinbase finally introduces DeFi yield product, bars United States users
Coinbase users can earn DeFi yield rewards on their DAI holdings with the exchange.
In September, the United States Securities and Exchange Commission (SEC) and the leading crypto exchange in the country, Coinbase, were at loggerheads over the crypto firm’s proposed yield program which the financial regulator considered to be a direct violation of its securities law.
While the exchange has since dropped its plan to launch the program in the United States, it has gone ahead to introduce the decentralized finance (DeFi) yield product in 70 other countries.
Coinbase introduces DeFi yield in 70 countries
According to a press statement released by Coinbase on Thursday, the crypto exchange will be providing exposure to DeFi for its customers who are looking to put their digital asset to work. For a start, users would be able to lend and borrow assets, like DAI —a Stablecoin.
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.
DeFi, no doubt, has recorded tremendous growth in this year. However, access to the space is still very much limited as it involves some level of technicalities that an average user might find difficult to navigate.
Coinbase looks to democratize access to the space by introducing its global customers to what many analysts have predicted to be the future of the world’s financial system.
How it will work
To enjoy Coinbase’s DeFi yield program, customers in the 70 countries would opt-in with their DAI stablecoin. This means that customers would deposit their DAI tokens with Compound Finance, the leader in the decentralized protocol.
It should be noted that the interest on this yield product might vary sometimes. According to Coinbase, the annual percentage yield (APY) for DAI supply was between 2.83% and 5.39% in the month of October.
The Brian Armstrong-led exchange revealed that it would be covering the transaction fees attached to this product, however, it beseeched its users “to make an informed investment decision” as it cannot guarantee that there wouldn’t be losses.