On August 25 local time, Galaxy Digital launched a "Crypto Portfolio Line of Credit" on GalaxyOne, its platform for US retail investors. Users can bundle their holdings of bitcoin (BTC), ethereum (ETH) and solana (SOL) into a single pool of collateral and borrow against them without selling the assets. Staked SOL can also be pledged as collateral without being unstaked, allowing users to continue receiving applicable staking rewards. Galaxy noted that rewards are not guaranteed and may vary. The credit line is set at 50% of the appraised value of eligible collateral at the time of application, the interest rate is a variable 8.99% per year, and there is no origination fee. It is a revolving structure with no set maturity, so users can borrow and repay repeatedly, and the minimum monthly payment is the equivalent of the interest owed. The variable rate may change after 30 days' advance notice and may be lower in some states. Loan proceeds can be used on the GalaxyOne platform or withdrawn in US dollars or in the dollar stablecoin USDC. Galaxy stated that it does not rehypothecate pledged assets by lending them to third parties or otherwise reusing them. The loan-to-value ratio (LTV) is refreshed every 60 seconds, and notifications are sent via in-app banner and email when it reaches 60%, 65%, 70% and 75%. If the LTV reaches 75% or higher, GalaxyOne sells BTC, ETH, SOL and staked SOL proportionally to bring the LTV back down to 65%. Standard trading fees apply in that case, and if staked assets are liquidated, a charge equal to 1% of the quantity of assets immediately unstaked for liquidation is applied. The product is offered on the basis of Galaxy's institutional platform rather than an external decentralized finance (DeFi) protocol. It is not available in some states, including California and Delaware. The Block reported that Nexo also offers a similar product that bundles multiple crypto assets into a single credit line.
GalaxyOne Launches Combined BTC, ETH and SOL Collateral Credit Line, With Staked SOL Usable as Collateral Without Unstaking
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Bundling multiple assets into a single credit line raises capital efficiency, but it also combines liquidation risk at the account level. When the LTV reaches 75%, GalaxyOne sells BTC, ETH, SOL and staked SOL proportionally to bring it down to 65%, and staked assets carry an additional immediate unstaking cost. Staged notifications are provided, but the published product description does not specify any grace period following a notification. If a similar product is to be brought within the domestic regulatory framework, disclosure should cover not only the loan-to-value ratio but also the pricing basis, the time between notification and automatic liquidation, the method for posting additional collateral, the mechanics of proportional selling, and liquidation costs.