Coinbase now lets eligible users post Solana (SOL) as collateral to borrow stablecoins, expanding its on‑chain lending options. The product runs on Morpho via Coinbase’s Base integration and lets users borrow up to $100,000 in USDC without selling SOL. The feature aims to give SOL holders liquidity while they keep exposure to the token.
How the Loan Works
Users lock SOL in a Morpho‑powered vault on Base and draw USDC according to a loan‑to‑value ratio. Limits and rates update automatically with market volatility and collateral risk. New York residents are excluded and borrowers must pass ID checks and Coinbase’s risk screens.
Coinbase previously offered similar BTC and ETH loans, and SOL is the first new Layer‑1 added recently. Since launch, the on‑chain lending product has issued over $2.3 billion in loans, with Bitcoin still the largest collateral class. Adding SOL gives users another way to get cash without selling assets.
Eligible U.S. customers outside New York can borrow up to $100,000 in USDC using SOL as collateral. The amount depends on collateral value and protocol risk parameters. Coinbase enforces caps and algorithmic controls to limit concentration risk.
Borrowers keep ownership of their SOL while the loan runs and repay the principal plus interest to reclaim the collateral. The product uses smart contracts on Base for on‑chain collateralization and repayment records. This noncustodial flow differs from traditional exchange margin loans.
Risks and Safeguards
Using volatile crypto as collateral can trigger liquidations when prices drop. Coinbase and Morpho apply dynamic loan‑to‑value ratios and margin checks to reduce sudden liquidations. Users should expect variable interest rates and automatic liquidation mechanics if SOL falls below safety thresholds.
Coinbase requires identity verification and risk assessments before approving loans. The platform also imposes per‑user borrowing caps and monitors collateral concentration across the book. These steps aim to limit systemic risk and protect retail users in stressed markets.
The new option gives SOL holders a way to access stablecoins without selling tokens and crystallizing taxable events. It may reduce sell pressure during short cash needs and offer traders more leverage and liquidity tools. Developers and institutional users may also use the feature to fund on‑chain strategies while maintaining SOL exposure.
Adding SOL also signals Coinbase’s intent to widen its on‑chain lending roster beyond BTC and ETH.
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