How Grove and Galaxy Digital built a $500M credit line on Sky Protocol
Grove committed USDS capital as warehouse lender for Galaxy Digital'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 for Galaxy to originate and service institutional loans secured by digital assets, with the resulting loan portfolio as collateral.
This deployment continues a relationship that began with the Galaxy CLO launched in January of 2026. Grove secured a deal to access USDS liquidity under a governance-approved mandate and deploying it into senior secured credit.
The Challenge
Galaxy Digital originates institutional loans backed by BTC and ETH, but it needed steady access to liquidity regardless of borrower demand, to create an origination cadence that follows Galaxy's own balance sheet. Growing the loan book required standing liquidity existing channels could not reliably supply.
Institutional borrowers hold large pools of BTC and ETH they want to finance against without selling.
Traditional warehouse lenders take longer to get comfortable with digital-asset collateral, keeping supply scarce.
Cyclical borrower demand 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 $500 million warehouse facility extends a relationship that began with Galaxy CLO 2025-1, the tokenized CLO Grove anchored in January 2026. Grove accesses USDS liquidity under its Sky Governance-approved mandate and deploys it as senior secured credit, with risk parameters fixed before any capital moves.
Key results
Galaxy now draws on a standing credit line instead of waiting on its own balance-sheet cycles. A $320 million loan can go from underwriting to funded over a weekend. Every loan is senior secured and fully funded, with BTC and ETH held at qualified custodians.
Warehouse credit funded mortgage and auto lenders for decades; this facility runs the same structure on USDS. Grove structured the legal, risk, and technical framework once, so the next originator with sporadic funding schedules and BTC or ETH collateral can scale from proven foundations.