How Grove built Galaxy a $500M credit line on Sky Protocol
Grove committed USDS capital as warehouse lender for Galaxy's institutional loan origination.
Overview
On July 15, 2026, Grove and Galaxy Digital announced a $500 million warehouse lending facility. Grove, a Sky Agent and credit infrastructure protocol, serves as the warehouse lender. Galaxy originates and services institutional loans secured by digital assets, with the resulting loan portfolio as collateral.
The facility deepens a relationship that began with Galaxy CLO 2025-1, which Grove anchored in January 2026. It is the system working as designed: an independent Agent accessing USDS liquidity under a governance-approved mandate and deploying it into senior secured credit.
The Challenge
Galaxy's lending business ran on episodic liquidity. Capital was abundant one month and locked in deals the next, forcing the desk to time originations around its own balance sheet rather than borrower demand. Scaling the book required standing access to liquidity that existing funding channels could not reliably supply.
Institutional borrowers hold large pools of BTC and ETH they want to finance against without selling. Serving that demand takes deep, dependable dollar liquidity.
Traditional warehouse lenders take longer to get comfortable with digital-asset collateral, keeping supply scarce.
Episodic funding meant origination could not scale predictably.
The Sky Solution
Grove structured a $500 million warehouse facility, committing USDS capital through a dedicated lending vehicle. Galaxy underwrites, originates, and services senior secured loans to institutional clients, collateralized by BTC and ETH, including natively staked and liquid-staked ETH, with Anchorage Digital and BitGo as qualified custodians.
The mandate and risk parameters were set through Sky Governance before capital moved. Once closed, the facility runs hands-off: any loan matching the agreed profile, senior secured, fully funded, with terms of two years or less, is originated without renegotiating access to liquidity.
Key results
A standing $500 million facility now finances Galaxy's institutional origination. Loans are senior secured and fully funded, with original terms of two years or less, against BTC and ETH held with qualified custodians. Galaxy originates against demand rather than against its own balance sheet cycles.
The structure that funded mortgage and auto lenders for decades now runs on USDS. For institutions with the same shape of problem, a governed, verifiable credit facility at this scale is no longer theoretical. It is live, and it is repeatable.