Sid Ramesh
@checkmate
Hi folks â we built a new product at @coinbase that lets you borrow USDC against Bitcoin, fully onchain and dead simple to use. We call this the DeFi mullet. CeFi in the front and DeFi in the back. This was a year long project with first principles thinking. âĄď¸ Doing an AMA through the weekend. Fire away questions or thoughts.
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Brenner
@brenner.eth
What are the risks beyond liquidation? In response to those risks, if something goes wrong and happens to the collateral, Does Coinbase take on those losses or are they shared with the consumer?
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Sid Ramesh
@checkmate
In short, the 4 main layers of risks to the user are: 1. Morpho - smart contract hacks, economic failure during black swan events and lack of liquidity to scale. 2. cbBTC - depegs, SC vulnerability, etc 3. Smart Contrat Wallet issues 4. Coinbase itself - potential reg issues, app downtime, and any account restrictions due to compliance or security policies preventing you access from your loan or embedded wallet temporarily. A number of these issues are mitigated to the best effort using our threat models and stop gaps to ensure quick responses in situations of hacks especially. That said, onchain financial services do come at a cost to the user and such losses will not be covered by Coinbase as we are operating a front-end technology solution to DeFi. There might be unique situations where losses could apply on behalf of Coinbase to the customer and more details can be found in our ToS.
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