Base credit markets grow 31% to $2B in outstanding loans as utilization rates surge

Floating-rate credit markets on Base have quietly crossed a milestone that would have seemed ambitious a year ago. Outstanding loans on Coinbase’s Layer-2 network grew 31% year-over-year, climbing from roughly $1.7 billion to approximately $2.3 billion.

The raw loan growth is impressive on its own. But the utilization numbers tell the more interesting story: capital efficiency jumped from 58% to 75%, meaning the money sitting in these lending pools is actually being put to work rather than collecting digital dust.

Morpho emerges as Base’s lending backbone

Much of this expansion traces back to Morpho, the lending protocol that has become the dominant engine of credit activity on Base. Morpho’s supplied liquidity on the network doubled over the past 12 months, rising from $1.0 billion to $2.1 billion.

USDC borrowing alone doubled to $2.0 billion, with a utilization rate of 90%.

The protocol hit $1 billion in active loans on Base by January 2026, representing roughly a 10x increase year-over-year at that point. By September 2025, active loans had already exceeded $2 billion, a 150% jump from the start of that year.

Across all its deployments, Morpho’s aggregate active loans have approached nearly $5 billion. Base accounts for somewhere between 29% and 31% of that total, making it one of the protocol’s most important markets by volume.

Coinbase integration changed the equation

A major catalyst for this growth was Coinbase’s decision to build its crypto-backed loan product directly on Morpho markets running on Base. The product lets users borrow USDC against assets like cbBTC, Coinbase’s wrapped Bitcoin token.

Morpho isn’t the only protocol benefiting from the expanding lending ecosystem on Base. Aave has seen its deposits on Base increase by $200 million since July 2026, a rise of 32% in just two months.

What 75% utilization actually signals

Utilization rate measures how much of the available lending pool is actually being borrowed. A utilization rate of 75% means three out of every four dollars deposited into these markets is actively earning yield through loans, up from 58% a year ago.

The 90% utilization rate on USDC borrowing is particularly notable. Rates that high typically push borrowing costs up through algorithmic interest rate curves, which in turn attract more depositors seeking higher yields.

One risk worth watching is concentration. Morpho’s dominance in Base’s lending markets means that any protocol-level issue, whether technical or related to risk parameters, could have outsized effects on the entire ecosystem.