Cardano’s ADA token has received a significant boost in utility through an integration with one of the United States’ leading cryptocurrency platforms. Coinbase has announced it will now accept ADA as collateral for crypto-backed loans, providing holders with a new method to access liquidity without selling their assets. This development arrives during a period of mixed signals for the Cardano ecosystem, raising questions about its potential market impact. The expansion of Coinbase’s lending program to include ADA was confirmed in a recent announcement.
Eligible users across most U.S. states can now borrow up to $100,000 in USDC stablecoin using their Cardano holdings as security. This move places ADA alongside major cryptocurrencies like Bitcoin, Ethereum, XRP, and Dogecoin within the platform’s lending services. The technical execution of these loans utilizes the decentralized Morpho protocol stack, with transactions settled on-chain via Base, Coinbase’s Layer-2 network. For long-term investors, this creates a practical tool: they can maintain their ADA position while unlocking cash-like funds for other uses.
A notable ancillary benefit highlighted is the potential tax advantage; borrowing against assets typically does not constitute a taxable disposal event, unlike an outright sale. Specific terms govern the new lending facility. A key figure is the Loan-to-Value (LTV) ratio, which is capped at 49% for ADA. This means a borrower can receive a loan worth up to 49% of the market value of their pledged Cardano tokens. To protect against volatility, a liquidation threshold is set at an LTV of 62.5%. This structure is designed to provide a buffer against normal price fluctuations, though it inherently relies on the collateral maintaining a relatively stable value.
ADA has been trading near a key support level around $0.28. On-chain metrics suggest tempered activity, with figures like the Total Value Locked (TVL) in Cardano’s decentralized finance sector and overall trading volumes showing declines. Earlier this month, regulated ADA futures contracts launched on the Chicago Mercantile Exchange (CME). This inclusion places Cardano within an exclusive group of digital assets tradable on the world’s largest derivatives exchange, opening doors to potential new liquidity sources and a broader investor base. In summary, Coinbase’s decision to integrate ADA into its lending program delivers tangible, additional utility for existing holders. The broader market, however, continues to watch for stronger signals of ecosystem growth and a sustained recovery in on-chain engagement to complement these infrastructural advancements.
Cardano’s ADA has gained practical utility as Coinbase now accepts ADA as collateral for crypto-backed loans. Eligible US users can borrow up to $100,000 in USDC by pledging their Cardano holdings, with a loan-to-value cap of 49% and a liquidation threshold of 62.5% to guard against volatility. The loans are executed via the Morpho protocol stack and settled on-chain through Base, Coinbase’s Layer-2 network. Borrowers can access liquidity without selling their ADA, potentially offering tax advantages since borrowing against assets is not a taxable disposal event. This expansion places ADA among major assets in Coinbase’s lending services and follows the broader trend of increasing DeFi liquidity; earlier this month, ADA futures contracts began trading on the Chicago Mercantile Exchange.
From a market perspective, ADA has traded near a key support around $0.28, with on-chain activity moderating as TVL and trading volumes retreat. While the development boosts Cardano’s utility, investors will look for stronger ecosystem growth and sustained on-chain engagement to validate the longer-term impact.
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