Grove, a credit infrastructure protocol, and Galaxy Digital Inc. (Nasdaq: GLXY) have announced a $500 million warehouse lending facility focused on institutional loans secured by digital assets, according to a press release from Grove Labs.

Under the arrangement, Grove acts as the warehouse lender, supplying capital denominated in USDS through a dedicated lending vehicle. Galaxy serves as the originator and servicer, underwriting loans to institutional clients and taking digital asset collateral.

Eligible collateral under the facility is limited to Bitcoin and Ethereum, including natively staked and liquid-staked ETH, held with qualified custodians Anchorage Digital and BitGo. Loans must be senior secured and fully funded, with original terms of two years or less. No more than 20% of the facility may consist of loans with original terms beyond one year.

ETH-backed loans are capped at 50% of the facility, with staked ETH limited to 50% of that share. Loan-to-value ratios are monitored continuously using price feeds from Chronicle.

The facility is secured at two levels: Grove's financing is secured against the loan portfolio, while each underlying loan is overcollateralized with cryptocurrency pledged by the borrower. Loans must be denominated in dollars or approved stablecoins, with interest paid at least monthly.

The announcement follows a December 2025 transaction in which Grove participated in Galaxy's first tokenized collateralized loan obligation with a $50 million commitment. The warehouse facility places Grove earlier in the credit process, providing funding that Galaxy uses to originate new loans rather than purchasing interests in already-packaged loan pools.