Core Insights - Coinbase has introduced a new loan option allowing eligible users to borrow up to 1 million dollars in USDC by using their ETH as collateral, enhancing its crypto-collateral product offerings [1][4][8] Group 1: Loan Mechanics - The ETH-backed loan is available to users in the United States, excluding New York residents, enabling them to lock up their ETH to receive a USDC loan [2] - The borrowing cap for this product is set at 1 million dollars, managed through Morpho's infrastructure while maintaining a user-friendly Coinbase interface [2][4] - Users retain exposure to ETH price movements while gaining immediate liquidity without needing to sell their assets [3] Group 2: Market Positioning - The addition of ETH as a collateral type alongside Bitcoin expands the range of assets users can leverage for borrowing on Coinbase [4] - This move addresses the needs of users who prefer to hold ETH long-term, allowing them to unlock value without liquidating their holdings [4][8] - The introduction of ETH-backed loans indicates Coinbase's deeper commitment to crypto-collateral lending, appealing to both small and larger borrowers [8] Group 3: Loan Management and Risks - Maintaining a healthy collateral ratio is crucial, as declines in ETH price can lead to automatic liquidation of the loan [5][7] - The fixed limit for ETH loans is 1 million dollars, while BTC-backed loans can support higher amounts, with interest rates fluctuating based on supply and demand [6] - Users have the flexibility to repay at any time, provided they maintain sufficient collateral to cover the loan [6][7]