Coinbase Wallet on Wednesday announced the integration of decentralized finance (DeFi) apps, enabling users to invest their holdings and earn interest.
The US-based exchange’s wallet platform already allows users to invest funds on DeFi platforms using decentralized application (DApp) browsers or WalletLink for desktop.
“However, it isn’t easy to compare rates or view total balances across different providers,” Sid Coelho-Prabhu, Coinbase Wallet lead, noted. “With today’s announcement, we’re making it even easier to use these DeFi apps by integrating them into the Wallet experience.”
The wallet will now allow users to check interest rates on different platforms and can also track their funds on the wallet dashboard.
“With this new lending experience, you’re just a few taps away from putting your money to work. Pick a coin to lend, pick a smart contract, and enter the amount you wish to lend. Your crypto is then deployed directly to the smart contract to start earning interest,” Coelho-Prabhu explained.
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The wallet already rolled out the feature on the iOS platform and assured users on Android that they will receive updates in “the coming weeks.”
Disrupting the finance industry
The DeFi platforms allow users to take loans backed by crypto collaterals.
“If a borrower wants to borrow $50, they might need to lock up at least $100 of crypto on the blockchain as collateral first,” Coinbase explained.
The demand for DeFi loans is increasing significantly, and though these platforms are seen as disruptors to the banking system, they still have massive flaws in their governance structure.
Recently, with the sharp decrease in Ethereum value, MakerDAO was on the verge of shutting down its protocol while bZx raised serious questions on DeFi models after subsequent hack jeopardizing $1 million in crypto.