· US clients will not access the new DeFi yield services on Coinbase.
· Users will use Compound Finance to generate yields. DAI supply increased by 2,300% in 2021.
· The leading US crypto exchange Coinbase plans to expand its financial services using the new DeFi offering. Nevertheless, North American clients might not access these services.
In a 9 December announcement, Coinbase highlighted launching new decentralized finance services to 'verified' clients in over 70 countries. For now, the DAI stable coin, MakerDAO's native coin, will host this DeFi yield product. The eligible customers can earn DAI yields using the Coinbase website and app. The firm revealed that.
The Securities & Exchange Commission had Coinbase suspending its motive for decentralized finance for the United States after threatening the trading firm about legal actions. That came as the company planned to launch Lend service in September. Investors could use Lend to earn USDC's interests, but the authority saw red flags.
However, market players do not know the reason behind SEC's decision. Coinbase CFO Alesia commented on that at the congress testimony this week. He said the securities regulator did not clarify its decision to allow their products.
Compound DeFi Yields
Coinbase will utilize Compound Finance, a DeFi lending network, for yields generation on DAI. Yearly percentage yields will depend on Compound's rates. Coinbase said that DAI supply APY exchanged hands from 2.83% to 5.39% in October. At this publication, Compound offered 3.34% on DAI deposits.
However, the company did not mention commission and fees from the yields but confirmed covering the gas fees. The firm warned about potential losses, though over-collateralization can annul that.
Users in Germany, the UK, Spain, and other nations can access Dei yields. Coinbase targets to expand these decentralized finance offerings in jurisdictions with strict rules on the services. It posted about launching the platform to explore various ways for customers to access many protocols and assets.
DAI Supply Increases
For now, DAI ranks 4th in the stablecoin list by market cap, as its total value stands at $8.91 (CoinGecko data). Meanwhile, DAI supply has increased by 2,300% since 2021 January, touching an ATH near $9 billion early this week. DAI differs from stablecoins like BUSD, USDC, and Tether MakerDAO crypto collateral supports the coin, and DAI is decentralized.