Coinbase and Robinhood have both launched approximately 7% USDC yield products, but the underlying designs are completely different

Coinbase launched a high-yield USDC lending tier with an annualized rate of about 7.02% a few days after the 7% yield campaign on Robinhood Earn, which is approximately double its standard tier of 3.63%. Both are routed through the decentralized lending protocol Morpho, which has a total value locked (TVL) of $7.11 billion, curated by Steakhouse Financial. However, according to analysis from the account Pink Brains, there are essential differences in the yield structures.

Robinhood's 7% is composed of borrower interest, USDG treasury reserve earnings, and subsidies distributed through Merkl. The subsidies cover the gap between organic earnings and the 7% target, with organic earnings actually around 3% in the middle range, meaning about half is from subsidies. Coinbase, on the other hand, circulates funds by lending Ethena USDe to the marginal funding rate of perpetual contracts, further layering MORPHO token rewards, with no fixed cap but also no guaranteed minimum.

Pink Brains pointed out that Coinbase's blended yield including rewards has dropped to 4.44%. Robinhood's subsidy commitment lasts for one year, betting on organic earnings rising with new lending demand; Coinbase's activity is unofficially estimated to last until mid-September.