How To Use Term Structure As A Coinbase User.

For Regular Coinbase users, you can use Coinbase alongside Term Structure to not just move funds around but improve your overall strategy.

As a Coinbase exchange user, it is important to know how to use and benefit from decentralized platforms such as Term Structure.

Term Structure is a decentralized fixed-income protocol powered by zkTrue-up, a platform that enables peer-to-peer lending and borrowing with fixed interest rates.

You can use Term Structure to borrow or lend crypto assets such as WBTC, WETH, USDT, USDC and DAI. To understand in detail how term structure works check our docs.

As a Coinbase user, you probably trade spot, or derivatives, P2P and a lot of other financial services Coinbase offers.

How do you use Term Structure as a Coinbase user? I will show you 3 smart ways.

A. Deposit on Term Structure using your Coinbase Wallet. Reduce L1 gas fees!

Instead of doing a two-step deposit, where you deposit funds from other wallets to Metamask, then deposit to term structure. You can deposit directly from your Coinbase wallet to Term Structure.

To do this, you need to have a wallet you can connect to Term Structure and make a deposit.

In this case you need to use Coinbase Wallet and you do not have to move your funds to Metamask thereby incurring gas fees.

Step One: Move your funds from Coinbase to Coinbase Wallet.

For details on how to withdraw funds from your Coinbase exchange account to Coinbase Wallet visit How to withdraw funds from Coinbase.

Coinbase does not charge withdrawal fees, withdrawals are fast and the gas fee is lower compared to moving funds from Metamask or other wallets or Coinbase Wallet. Instead of moving funds in your ledger or other cold or hot wallets, just move funds from your trades on Coinbase to your Coinbase wallet.

For some reason most exchanges subsidize gas fees for withdrawals! Yes, a couple of persons have mentioned that they see a lesser gas fee when withdrawing from an exchange, than when transferring between wallets.

Also withdrawing $2000 will likely cost you the same gas fee as withdrawing $150, but transaction fee differs when moving across wallets, when transferring different amounts of a coin or token.

Step Two: Visit Testnet, click connect, select Coinbase wallet and authenticate your wallet.

Install the browser extension. If you have already installed it, just connect your wallet.

Step 3: Deposit your assets. Refer to this video guide on how to deposit on Term Structure.

B. Swap From One Asset To Another On Coinbase. Improve Your Overall Strategy!

OK! You have made a deposit and successfully borrowed WBTC on the primary market, using your USDC as collateral.

(If you need a guide on how to borrow, refer to our Tutorial)

After you borrow, Bitcoin is down, the health of your position is less than one, you need to add more collateral, but you only have BTC in your account, how do you get USDC to increase your collateral. Two options:

  1. Use a decentralized exchange like Uniswap etc

  2. Transfer funds from your Coinbase account.

  3. Deposit your WBTC on Coinbase and convert it to USDC.

The first option might be expensive, since you are swapping on Ethereum mainnet.

The second option is reasonable, while the third option might be expensive because you will pay gas for depositing and withdrawing.

However, you can use any of the options depending on your overall strategy and situation.

It is advisable to always leave some funds on Coinbase, so that if you need to add collateral or change your trading strategy, you can easily convert to the particular token you need and withdraw it to your wallet.

C. Hedge Your Coinbase Futures/ Leverage positions.

As a smart futures trader, you might want to hedge your leverage positions on Coinbase by using Term Structure.

Let’s say you have a short position for ETH-USDT, you can hedge this position by lending ETH on Term structure using a stable coin as collateral. If your short position is not profitable, you can benefit from the increased value of the ETH you borrowed. You pay off less ETH and keep the difference.

Another way can be to borrow USDT to hedge your position on Coinbase futures. If you are close to your liquidation threshold, and you do not want to sell your ETH or BTC, you can use it as collateral on Term Structure and get USDT, which you can use to hedge your leverage position on Coinbase.

The ideas shared here will require more diligence on your part, it will also require you to apply some accounting and economic principles in managing your assets.

Finally, this article assumes you are a regular user of Coinbase and you have most of your trading assets there.

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