Coinbase bypasses yield restrictions via Ethena
Coinbase's partnership with Ethena to offer a front-end yield product represents a creative regulatory workaround to provide yield to users without violating US stablecoin laws.
The argument
The guest argued that while the Clarity Act restricts platforms from passing treasury yields directly to US users, integrating Ethena's delta-neutral perp basis trade yield allows Coinbase to offer an economically equivalent yield product. Additionally, Coinbase can legally distribute this yield to its large non-US user base.
The thesis, stress-tested
✓ What validates it
- ✓Successful rollout of the Ethena yield product on the Coinbase app
- ✓Increased retail asset inflows into Coinbase's yield-bearing products
▸ Risks discussed
- ▸Ethena's basis trade yield could compress further in bearish markets
- ▸Regulators may challenge creative DeFi-partnered yield structures
Hear it yourself
"Right? He lost so much more money in his NAV because of how much Bitcoin went down from that sale relative to the amount of cash you would need to raise to pay dividend holders, which tells you the way that you raise this money is not by selling. That breaks the whole system. You you have lost more than you would have conceivably have gained. So now I I think the lesson that the market is telling him is, no. No. No. No. No. No. You gotta die with the ship. You are you do not get to be a prudent financial manager. You are mister Bitcoin. Mister Bitcoin doesn't get to sell."
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