Coinbase just added staked SOL as collateral for its crypto-backed lending product, rounding out a quiet but aggressive expansion that now lets US customers borrow against Bitcoin, staked ETH, and Solana without selling a single token. The cumulative originations for Coinbase’s lending product have reached $2.3 billion by mid-May 2026.

How the loans actually work

The staked ETH loan product, which uses cbETH as collateral, launched around January 22-23, 2026. Borrowers can take out up to $1 million in USDC against their staked Ethereum positions.

SOL and JitoSOL support followed on May 12-13, 2026, with a lower ceiling of $100,000 in USDC. The gap between those two limits reflects the difference in market depth and volatility profiles between the two assets.

Variable interest rates start as low as roughly 5%. There are no fixed repayment deadlines, meaning borrowers can pay back whenever they want.

The entire mechanism runs through Morpho, an on-chain lending protocol deployed on Base, Coinbase’s Layer 2 network. Your collateral moves to a smart contract on the blockchain rather than sitting in Coinbase’s custody. The platform calls this “non-custodial,” meaning users retain meaningful control over their assets even while they’re pledged as collateral.

Liquidation protection and overcollateralization

Coinbase has set an 86% loan-to-value ratio as the liquidation threshold for staked ETH loans. For SOL-backed loans, that threshold drops to roughly 70%, accounting for Solana’s historically higher volatility.

To put those numbers in context: if you borrow $100,000 against your cbETH, your collateral needs to stay above approximately $116,000 in value to avoid liquidation at the 86% LTV mark. For SOL borrowers taking the maximum $100,000 loan, the collateral floor sits closer to $143,000.

Automated warnings notify users when their collateral value starts approaching dangerous territory.

The broader lending strategy

Coinbase started with Bitcoin-backed loans in January 2025 and has been methodically adding collateral types since then. The progression from BTC to staked ETH to SOL follows a logical path of decreasing market cap and increasing volatility, with loan limits adjusted accordingly.

With cbETH and JitoSOL, borrowers aren’t just parking idle assets as collateral. They’re using yield-bearing tokens, which means their collateral is effectively working double duty: securing the loan and generating staking income simultaneously.

For Ethereum stakers, this eliminates a frustrating tradeoff. Previously, if you needed liquidity, you either unstaked your ETH (losing rewards and waiting through withdrawal queues) or sold it outright (triggering a taxable event). Now you can keep your staking position intact, access cash, and defer any tax implications from a sale.

One geographic caveat: the service is available exclusively to US customers, with New York residents excluded. New York’s BitLicense regime continues to be the regulatory moat that keeps Empire State residents locked out of certain crypto products.

What this means for investors

The risk factors are worth watching carefully. Variable rates starting at 5% can move higher, potentially squeezing borrowers who aren’t paying attention. Smart contract risk on Morpho, while mitigated by audits and battle-testing, never fully disappears. And during sharp market downturns, the gap between a warning notification and actual liquidation can narrow faster than most borrowers expect.

Coinbase is building a full-stack financial services platform where users stake, borrow, trade, and bridge assets without ever leaving the Coinbase orbit. Staking drives cbETH adoption, cbETH enables borrowing, borrowing keeps assets on the platform, and the whole loop runs on Base.