Coinbase now lets eligible US users pledge Hyperliquid's HYPE and Zcash's ZEC as collateral to borrow up to $100,000 in USDC without selling their holdings, the exchange confirmed through its app-based lending product. The feature is available to users in the United States outside New York.

The addition extends a deliberate collateral expansion program that began in February. Coinbase's loan product already accepts XRP, DOGE, ADA and LTC, alongside previously supported assets. By structuring the offering as a loan rather than a sale, the product lets holders access liquidity against appreciated positions without triggering a taxable disposal — a structural consideration for US taxpayers holding assets with embedded gains.

The borrowing mechanics run entirely on-chain. Coinbase's lending infrastructure is built on Morpho, an on-chain lending protocol, and each collateral posting through the Coinbase app executes against Morpho's markets in the background. Users never interact with the protocol directly, but the risk parameters are those of the underlying markets Coinbase has configured.

Those parameters matter for anyone sizing a position. Altcoin collateral on the platform carries a maximum loan-to-value ratio of 49% and a liquidation threshold of 62.5%. A user posting $10,000 worth of HYPE can borrow roughly $4,900. If the collateral's value falls to the point where the outstanding loan represents 62.5% of the position, the protocol liquidates it.

The wrapped-asset groundwork

The HYPE and ZEC integration was made possible by infrastructure Coinbase deployed weeks earlier. On September 1, the exchange launched cbHYPE and cbZEC on Base, its Ethereum Layer 2 network. These wrapped tokens are backed one-to-one by assets held in Coinbase's custody infrastructure.

Wrapped assets function as DeFi-compatible representations of tokens that would otherwise face technical barriers to integration. HYPE exists natively on Hyperliquid's own chain and ZEC on the Zcash network; neither token moves natively to Ethereum-based applications. By wrapping them, Coinbase built the plumbing that lets these assets flow into Morpho lending markets, liquidity pools and other on-chain applications on Base without requiring users to bridge to each asset's native chain.

The sequencing suggests a coordinated rollout. Discussion of the additions surfaced on social media between September 27 and 29, with Morpho's CEO among those highlighting the development. The wrapped asset infrastructure launched first, followed by lending integration roughly a month later.

Scale of the book

Coinbase's lending product has processed between $1.9 billion and $3 billion in cumulative USDC loan originations since inception, according to figures the company has disclosed. That volume positions the offering as one of the larger regulated-access conduits into on-chain credit markets for US retail users.

The operational consequence for Morpho is a growing share of institutional-grade flow routed through its markets via a compliant front-end, which continues to shift on-chain lending activity toward wrapped, custodian-backed collateral rather than user-held keys.

For Coinbase, the expansion deepens the utility case for holding altcoins on the platform rather than in self-custody, and each new wrapped asset — cbHYPE and cbZEC are the latest — adds raw material for future Base-based DeFi integrations beyond lending. Expect the collateral list to keep growing as Coinbase wraps more assets on Base; the pattern established since February points to continued monthly additions.