Ethena announced an institutional‑lending framework on October 29 that outlines a new process for onboarding borrowers whose assets back the synthetic dollar USDe. Under the rules, the trading team can approve qualifying borrowers without a separate vote from the Risk Committee, though the committee continues to receive borrower documentation and retains oversight powers.
Key elements of the framework
The framework, posted by Kairos Research, specifies that eligibility requires bilateral lending with full recourse to the borrower or a parent guarantee, jurisdiction and standing checks, sanctions screening, segregated tri‑party custody, and daily collateral reporting. Collateral must be held with a third‑party custodian.
Borrower documents are sent privately to the Risk Committee at least three business days before funding. If a committee member identifies a failed criterion, a decision must be made within five business days. The committee retains the ability to call in a borrower based on specific criteria, while funding during a pending objection is not detailed.
Loan terms and monitoring
The lending team sets loan‑to‑value (LTV) rate cards, which are shared monthly with the committee along with book reporting. LTV measures the loan amount relative to collateral value. A missed margin call, default, or change in borrower standing halts new lending to that counterparty and triggers escalation within 48 hours.
Permitted collateral includes Bitcoin (BTC), Ethereum (ETH) and other specified assets. Certain assets such as USDe, sUSDe, ENA, USDtb and borrowers’ own assets are excluded. Ethereum‑based XAUT is allowed only if custody, liquidation venues, and a weekend liquidation test are satisfied.
Governance and limits
The framework preserves five existing approvals and does not set a public aggregate lending cap or per‑borrower concentration ceiling. Aggregate exposure limits remain under governance and committee review, but numerical ceilings are not disclosed.
Earlier partner‑by‑partner arrangements, such as the March 10 proposals with Maple and Anchorage, required new Risk Committee proposals for additional off‑chain partners. The new framework changes only the approval authority, not the confidentiality of existing agreements.
Impact on USDe holders
For USDe holders, the published eligibility rules and exposure disclosures provide a basis to assess credit risk associated with institutional lending. Ethena’s lending dashboard indicates that collateral is held with custodians, monitored continuously for LTV, and not rehypothecated. As of the November 1 capture, borrower‑level exposure details were not populated, leaving current borrower exposure and collateral ratios unavailable.
