What is DeFi yield?
DeFi Yield lets eligible Coinbase customers earn yield by lending their crypto to third-party DeFi protocols. Currently, you can earn yield on a select number of currencies, including Dai and USDT. To see the full list of supported DeFi yield currencies, sign in to your Coinbase account.
When you opt in to earn DeFi yield, your crypto is deposited into Compound Finance which is an industry-leading DeFi protocol. Then you let your crypto work and earn yield. The offered APY varies based on the rates from Compound and market conditions.
Who is eligible for DeFi Yield?
To be eligible, you must:
Live in an eligible jurisdiction
DeFi Yield is available in over 70 countries, including the United Kingdom, Germany, and Spain
DeFi Yield is currently not available to US customers
Have an eligible asset in your Coinbase account
If you are eligible for DeFi Yield, you will see an option to participate in the program:
What is DeFi?
Decentralized finance (DeFi) refers to a variety of online financial marketplaces, called DeFi protocols, that run on blockchains. Unlike conventional financial marketplaces, DeFi protocols are not controlled by centralized entities. Instead, they are managed by decentralized software applications (dApps) that allow users to interact with them using only a cryptocurrency wallet. As a result, DeFi protocols are trustless, permissionless, and anonymous, allowing anyone to participate. The DeFi ecosystem has grown into an online network of financial marketplaces with over $185B of funds deposited.
Learn more about the basics of DeFi.
What is Compound?
Compound is a DeFi lending protocol that allows anyone to loan their stablecoins and anyone to borrow them. Lenders earn yield and borrowers gain access to stablecoins without having to sell their other crypto-assets. Lenders deposit their stablecoins in a liquidity pool and borrowers can draw loans from that liquidity pool by depositing other crypto-assets, like Ether (ETH), as collateral. Lenders receive their share of borrowers’ yield in the form of the stablecoin that they deposited.
How much yield will I earn with DeFi Yield?
Your DeFi Yield rate on Coinbase will vary depending on market conditions. Compound pays a variable yield rate for deposits depending on the amount currently available in its liquidity pool. If Compound needs more assets in its liquidity pool and wants to incentivize lenders to deposit more, they will raise the yield rate. If fewer people are borrowing and Compound does not need new deposits, they will lower the yield rate. So, there is no way to predict exactly how much yield you will earn through DeFi on Coinbase. Historically, yield rates on Compound have ranged anywhere from 2%-10%.
What fees are associated with DeFi Yield?
DeFi Yield users are expected to earn rewards through the DeFi Yield program—the specific rate of which will be determined by the protocols of the applicable network. Coinbase will distribute earned rewards to you after receipt by Coinbase.
What is the minimum/maximum amount I can deposit in DeFi Yield?
There is no minimum or maximum amount of crypto that you can deposit in the DeFi Yield program. However, if you choose to participate, you must deposit your entire balance of the asset. For example, if you have a balance of 100 DAI and you'd like to deposit it into DeFi Yield, you must deposit the entire 100 instead of a partial amount.
For fees related to trading crypto, please visit our pricing and fees disclosure page.
How will I receive my DeFi Yield?
Your DeFi Yield will appear in your Coinbase account and will be automatically added to your crypto holdings. You will receive all of your yield in the form of whichever crypto that you're earning yield on.
When can I withdraw my funds from DeFi Yield?
You can withdraw funds from DeFi Yield at any time.
To opt out of DeFi Yield, sign in to your Coinbase account and follow these steps:
On the web:
Select Earn from the left-hand navigation
From the Earn page, select the asset and then Manage interest
Follow the remaining prompts
On the Coinbase mobile app:
Tap the menu icon in the top left corner, then Earn
Select the asset you want to opt out of, then select Manage
Follow the remaining prompts
What are the risks of using DeFi?
Use of all DeFi protocols involves certain risks. You can read more about them here.
We do not offer insurance or otherwise guarantee your crypto-assets whilst they are deposited in any DeFi protocols. By using DeFi on Coinbase, you assume the risk that your crypto-assets may be lost, as described in the DeFi Yield section of the applicable User Agreement.
Why does Coinbase only accept deposits in select assets for DeFi Yield?
DeFi Yield will initially only be available for a few select assets, but we plan to expand the program soon to include other tokens and DeFi protocols. For updates, feel free to follow Coinbase on Twitter.