- The largest American crypto exchange by number of users, Coinbase, has announced to integrate Ethereum based DeFi applications directly into its wallet app for iOS and Android.
- Users of the Coinbase wallet app will be able to borrow cryptocurrencies directly from the wallet and earn interest on decentralized platforms.
According to many experts, the decentralized financial system (DeFi) on Ethereum offers an enormous potential to revolutionize the traditional financial system. In December 2019, for example, the Ethereum incubator ConsenSys stated that DeFi applications could reach a billion dollars in value. However, this requires broad acceptance, which can only be achieved through an easy and risk-free access.
Coinbase, the largest American crypto exchange, presented a solution for the former yesterday. The crypto giant announced that DeFi applications will be integrated directly into the iOS and Android the wallet app of Coinbase. This will allow users of the Coinbase wallet to lend their cryptocurrencies directly from the wallet and earn interest on decentralized finance applications. The iOS app is due to be released this week, while the Android version will follow in the following weeks.
Does Coinbase lead Ethereum’s DeFi into the mainstream?
As Coinbase states, thousands of users are already accessing DeFi apps, such as Compound and dYdX, indirectly via the decentralized application (dApp) browser from the wallet or via WalletLink on the desktop. The entire process is supposed to be made much easier by the integration into the mobile applications:
However, it isn’t easy to compare rates or view total balances across different providers. With today’s announcement, we’re making it even easier to use these DeFi apps by integrating them into the Wallet experience. You can now compare different rates from providers, easily deposit your crypto without opening a web browser, and view your balances on a simple, unified dashboard.
So the big advantage of the app is that those interested don’t have to work their way through the complicated DeFi jungle to find a high interest rate application that suits them. Instead, over 30 million Coinbase customers get direct access to Ethereum’s DeFi ecosystem via the Coinbase wallet app and can choose between different DeFi platforms. As Coinbase explains, the new feature will be available to users all over the world.
At the same time Coinbase also points out that DeFi credit platforms are relatively nascent and have risks. As Coinbase states “the return is not guaranteed” and the deposits are not insured. Most recently, the big crash on 12 March put the sustainability of the DeFi market into question.
As CNF reported, the massive drop in Ethereum’s price (-58%) led to DeFi platforms such as MakerDAO having serious problems in dealing with user requests. As the price dropped dramatically, many borrowers saw their Collateralized Debt Positions (CDP) liquidated at 100% of their value, partly because of severe delays in Ethereum’s network.