APY rewards for those who hold USDC

Coinbase Wallet introduces a new APY reward scheme of 4.7% for USDC holders. A move to incentivize the adoption of the stablecoin and strengthen its ecosystem based on the Layer 2 Base network.

Let’s see all the details in this article. 

New yield opportunities for Coinbase Wallet users with the stablecoin USDC

As anticipated, Coinbase Wallet, the digital wallet of the leading exchange Coinbase, has announced the introduction of an annual reward of 4.7% for holders of the USDC stablecoin.

This new initiative aims to incentivize users to hold USDC and leverage Coinbase’s integrated platforms, consolidating the position of the cryptocurrency giant in the stablecoin market.

The rewards are distributed on a monthly basis through the Layer 2 Base network, developed internally by Coinbase to optimize transactions on the blockchain Ethereum.

This function is already accessible to global users, while for residents in the United States the rollout is expected within a few days. 

The initiative represents an evolution of Coinbase’s previous offerings, which already guaranteed returns for those holding USDC. However, now, at lower rates: initially 2%, then increased to 4% before reaching the current 4.7%.

According to Coinbase, the funds for these rewards come directly from the company, which has chosen to invest in this strategy to promote the use of its platforms and consolidate the adoption of USDC.

We remember that, launched in 2018 by Coinbase in collaboration with Circle, USDC is a stablecoin pegged to the value of the US dollar. 

Currently, it is the second most popular stablecoin in the world, with a share of about 25% of the total stablecoin supply, estimated at 107.33 billion dollars as of November 20.

The stablecoin USDC is considered one of the most reliable options in the market, thanks to the transparency and regulated management guaranteed by Coinbase and Circle. 

The acquisition of a shareholding in Circle by Coinbase in August 2023 further strengthened this strategic partnership, laying the foundations for an even more significant expansion of the ecosystem linked to USDC.

A comparison with other stablecoins and the role of the Layer 2 Base network

Despite the strong growth of USDC, Tether (USDT) continues to dominate the market as the most used stablecoin in the world.

However, the innovative approach of Coinbase, based on competitive returns and operational transparency, could attract a growing number of users towards USDC.

Unlike Tether, often criticized for the lack of transparency in reserve management, USDC stands out for its regulated and verifiable approach. 

This positioning allows USDC to maintain a solid image and attract both institutional and retail investors.

In any case, the introduction of the Layer 2 Base network represents a key element in Coinbase’s offering. 

This technological solution is designed to improve the efficiency of transactions, reducing costs and increasing speed compared to the main Ethereum blockchain.

Thanks to Base, Coinbase Wallet users can benefit from a smoother and more convenient experience, further encouraging the adoption of USDC. 

The choice to use this infrastructure to distribute rewards demonstrates Coinbase’s commitment to integrating cutting-edge technology to improve its services.

Implications for the cryptocurrency market

The move by Coinbase is not only an opportunity for its users, but also an important signal for the bull market of criptovalute.

Offering a competitive annual yield for a stablecoin like USDC could drive other platforms to develop similar programs, increasing competition and improving the offerings for end users.

Furthermore, the growing adoption of USDC could strengthen Coinbase’s position as a market leader, consolidating its ecosystem and attracting new users interested in stable and profitable financial instruments.