Crypto-Backed Loans: Coinbase vs Ledn vs DeFi

What a bank would do — and what you do instead

A bank lends against your income and credit history, sets a rate and, if you fall behind, works through a slow and regulated collections process. Crypto lenders and protocols lend against collateral instead, with no credit check. That makes borrowing fast, but enforcement is fast too: if the collateral falls far enough, it is sold automatically. Being your own bank here means being your own risk manager.

The options, side by side

Lender	Rate (dated, variable unless noted)	Liquidation	Notes
Coinbase (Morpho on Base)	As low as ~4–5% variable; fixed-rate option added Sept 22, 2026	86% LTV	BTC converted to cbBTC; not available in New York
Ledn	9.25–11.49% APR tiered by size	80% LTV	BTC only; 50% starting LTV; 12-month term; $500 minimum; alerts at 70% and 75%
SALT	From 7.49% APR at 30% LTV	Varies	Lower LTV, lower rate
Strike / Arch	From 7.49% (>$5M) / 7.25% (>$10M)	Varies	Headline rates for very large loans

Coinbase’s product had more than $1.4B outstanding backed by about $3B of collateral in September 2026. Its fixed-rate loans run on Morpho Midnight, which launched July 21, 2026.

Custodial vs DeFi

With Ledn or SALT a company holds your BTC. With Coinbase’s Morpho-based loans your collateral sits in a smart contract, accessed through Coinbase. With DeFi used directly, you interact with the protocol yourself. In 2022, several custodial lenders froze withdrawals — collateral custody is not a detail.

Frequently asked questions

Is a crypto loan taxable?

Borrowing is generally not a taxable sale in many jurisdictions, but a liquidation usually is. Ask a tax professional.

What LTV should I start at?

There is no universal answer, but many cautious borrowers stay far below the liquidation threshold, leaving room for a 50% price drop.

Last reviewed: October 1, 2026