Coinbase USDC lending explained: Morpho and Steakhouse
Coinbase users can lend USDC via Morpho vaults curated by Steakhouse Financial on Base. Learn how the two vaults work, where yield comes from and the risks.
Updated
Since 18 September 2025, Coinbase customers have been able to lend their USDC from the Coinbase app and earn interest paid by borrowers. Behind the scenes, the money goes into Morpho vaults on Base that are curated by Steakhouse Financial. This guide explains how it works, where the yield comes from and how it differs from Coinbase's USDC Rewards.
How it works
- You choose an amount to lend in the Coinbase app, up to 5 million USDC at any time.
- Coinbase sets up a self-custodial smart wallet for you, which signs the transactions.
- Your USDC is deposited into a Morpho vault on Base, and you receive vault shares.
- The vault lends the USDC to borrowers across several Morpho markets, and interest accrues in real time.
- You can usually withdraw at once. When many people withdraw together, there may be a wait.
Coinbase states that it does not have access to the deposited assets and does not control the smart contracts. Vaults, shares and withdrawals are explained in how Morpho vaults work.
At launch Coinbase rolled the feature out in the US, except New York State, and in other countries. Its help pages say availability depends on where you live and mention Canada among the eligible countries.
Two vaults: core and high yield
Since 11 June 2026 there have been two vaults to choose from, both curated by Steakhouse Financial. Names vary: Coinbase's blog calls them Core and High Yield, and its help pages call them prime and high-yield. Coinbase does not publish the vault addresses, but public on-chain data points to two vaults on Base with tens of thousands of depositors each: Steakhouse USDC for the core tier and Steakhouse High Yield USDC Edition for the high-yield tier. (A different vault called Steakhouse Prime USDC has far fewer depositors and does not appear to be Coinbase's.)
| Core (prime) vault | High-yield vault | |
|---|---|---|
| Lends against | Mainly large crypto assets such as BTC and ETH | A broader set, including altcoins, yield-bearing stablecoins such as assets powered by Ethena, and tokenized real-world assets |
| Aim | A lower risk profile | Higher yield in exchange for higher risk |
| Token rewards | May be paid, for example in MORPHO | May use MORPHO or partner incentives to reach its target rates |
| Risks Coinbase highlights | The general protocol, bad debt and liquidity risks listed below | The same, plus more volatility, peg risk and credit risk, and a higher risk of loss if markets move against the collateral or liquidations fail |
The app shows each vault's current rate, liquidity, holdings and address before you deposit.
Where the yield comes from
- Borrower interest. Most of the yield is interest paid by people borrowing USDC in the vault's markets. On-chain data shows the core vault lending almost all of its USDC into the same cbBTC market that backs Coinbase's bitcoin loans, so much of its interest comes from Coinbase's own borrowers. The high-yield vault lends mostly against Ethena's USDe. It moves with how much of each market is borrowed.
- Rewards. Part of the yield can be paid in MORPHO or other tokens, which must be claimed in the app. Coinbase One members may receive boosted rewards.
- Fees. Any vault fee comes out of the interest before it reaches depositors. The fee each vault charges is shown on its page in the vault list.
At launch Coinbase advertised yields of up to 10.8%, as of 18 September 2025. Rates have moved a lot since. The live rate and its history are on the Coinbase USDC lending rate page, and Morpho APY explained shows how to read it.
How it differs from Coinbase USDC Rewards
| USDC Rewards | USDC lending | |
|---|---|---|
| What it is | A loyalty program funded by Coinbase | Lending on Morpho through a vault |
| Is your USDC lent out? | No, Coinbase says it does not lend it | Yes, to borrowers in Morpho markets |
| Who sets the rate | Coinbase | The market, through borrower demand |
| Who can use it | In the US and some other regions, Coinbase One members only | Eligible customers where lending is available |
| Can you lose money? | No lending risk, since your USDC is not lent | Yes, through bad debt in the vault's markets |
Risks
Coinbase's help pages list three main risks, and each one is a feature of Morpho vaults in general:
- Protocol risk: a bug or attack on Morpho's contracts could lose funds.
- Bad debt risk: if a borrower's collateral falls faster than it can be liquidated, the loss is shared among the vault's depositors and lowers their balances.
- Liquidity risk: in times of heavy withdrawals there may be delays.
To this we would add curator risk: the choice of markets, collateral and oracles is Steakhouse Financial's. You can see the vaults' allocations on the vaults page and the curator's other vaults on the curators page. Past incidents across Morpho are covered in Morpho risks explained.
Common questions
Who curates Coinbase's USDC lending vaults?
Steakhouse Financial curates both vaults, the core (or prime) vault and the high-yield vault. They run on Morpho on Base.
Is Coinbase USDC lending the same as USDC Rewards?
No. USDC Rewards is a loyalty program that Coinbase funds without lending your USDC. Lending sends your USDC into a Morpho vault, where borrowers pay the interest and bad debt can cause losses.
Can I withdraw my lent USDC at any time?
Usually yes, straight away. If the vault's markets are heavily borrowed and many lenders withdraw at once, you may have to wait until liquidity returns.
Why is the high-yield vault's rate higher?
It lends against riskier collateral such as altcoins, yield-bearing stablecoins and tokenized real-world assets, whose borrowers pay more, and it may add token incentives.