Core Insights - Coinbase has launched a lending product that offers returns of up to 10.8% on USDC deposits, with a temporary boost from DeFi lender Morpho [1][2] - Approximately 6% of the product's returns are derived from Morpho's platform, while an additional 5% is enhanced by the protocol itself [1] - The lending product's competitive yields have raised questions among users, reflecting the lingering concerns from the crypto lending contagion of 2022 [3][4] Product Details - The lending product's advertised return is significantly lower than the 20% returns previously offered by Anchor Protocol before its collapse in 2022 [4] - Morpho operates on Ethereum and Coinbase's layer-2 network Base, allowing users to create customizable markets for overcollateralized loans [6] - Steakhouse Financial is responsible for curating the vaults where users deposit funds, managing risk, and allocating USDC to various markets [6] Performance Metrics - The only vault associated with Steakhouse on Morpho's Base had $24 million in USDC deposits, offering an annual percentage yield of 5.87% and a 25% performance fee [7] - Over 98% of the vault's funds were allocated to lending markets for wrapped Bitcoin and Ethereum, including Coinbase's cbBTC and cbETH products [7]