Coinbase Wallet has expanded its decentralized finance (DeFi) capabilities by integrating support for leading lending protocols Compound and dYdX. This update enables users to lend their cryptocurrencies and earn interest directly through the wallet interface.
Streamlined DeFi Lending for Coinbase Wallet Users
The integration simplifies access to DeFi applications, allowing users to:
- Lend Ethereum (ETH) and ERC-20 tokens via Compound and dYdX.
- Earn floating interest rates (0.03%–4.17% APY at launch).
- Withdraw funds seamlessly back to their wallets.
Previously, these protocols were accessible only through Coinbase Wallet’s dApp browser. The update aims to improve usability, particularly for beginners exploring DeFi.
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Supported Protocols at a Glance
| Protocol | Features | Total Value Locked (TVL) |
|-----------|-----------------------------------|-------------------------|
| Compound | Algorithmic lending/borrowing | $79M |
| dYdX | Margin trading + lending | $20M |
Security Warnings and Risks in DeFi
While Coinbase promotes the convenience of its new DeFi integrations, it cautions users about inherent risks:
- Smart contract vulnerabilities: Bugs may lead to fund loss.
- No insurance: Deposits aren’t FDIC-insured.
- Permanent permissions: DApps often gain indefinite wallet access.
ZenGo’s Findings on DApp Security
On March 23, wallet provider ZenGo revealed a critical flaw in DApp-wallet interactions:
- Single-transaction approval grants full wallet control.
- Authorizations persist indefinitely, even after disuse.
Coinbase has not yet commented on these security concerns.
FAQs
1. How do I lend crypto via Coinbase Wallet?
Navigate to the "DeFi" tab, select Compound/dYdX, and follow the prompts to deposit assets.
2. Are DeFi returns guaranteed?
No—interest rates fluctuate, and principal isn’t insured.
3. Can I revoke DApp permissions?
Yes, but manually via Ethereum block explorers like Etherscan.
4. When will Android support launch?
Coinbase confirms it’s "coming soon" after iOS rollout.
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Conclusion
This update positions Coinbase Wallet as a bridge between mainstream users and DeFi’s earning potential. However, users must balance opportunity with caution, given DeFi’s experimental nature and security risks.
For further reading, see our guide on DeFi risk management.
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Coinbase Wallet, DeFi lending, Compound, dYdX, Ethereum, crypto security, interest earnings, DApp risks