Ethena’s trading team can approve borrowers of assets backing USDe under new rules

The new institutional-lending framework establishes a delegated approval route for Ethena's trading team to onboard qualifying borrowers of assets backing USDe. This represents a shift from the previous approach that required individual Risk Committee votes for each borrower. The framework maintains committee oversight through private document submissions and call-in powers.

Under the published rules, borrower eligibility combines bilateral lending with full recourse to the borrower or a parent guarantee, jurisdiction and standing checks, sanctions screening, segregated tri-party custody and verifiable daily collateral reports. The committee receives borrower documents privately at least three business days before first funding, with a five-day window to object if any criterion fails.

Lending Framework Details

The trading team sets loan-to-value rate cards, shared monthly with the committee alongside book reporting. A missed margin call, default or changed standing stops new lending to that counterparty and triggers escalation within 48 hours. Permitted collateral includes BTC, ETH and other specified assets, with USDe, sUSDe, ENA, USDtb and borrowers' own assets excluded.

Ethereum-based XAUT is conditional on custody arrangements, liquidation venues and a weekend liquidation test. The framework preserves five existing approvals but sets no numerical aggregate lending cap or per-borrower concentration ceiling, though aggregate exposure limits remain under governance and committee review.

Previous Approach and Legal Considerations

The earlier partner-by-partner approach was evident in the March 10 Maple and Anchorage proposal, which required new proposals to the Risk Committee for additional offchain partners. The October development specifically concerns approval authority rather than confidentiality, which was already maintained in previous reviews.

Retaining the five existing approvals preserves arrangements with different structures, though not every legacy pool or warehouse meets the new bilateral criteria. For example, LlamaRisk's August 4 FalconX review described warehouse financing through a special purpose vehicle structure rather than ordinary bilateral borrowing.

Current Exposure and Transparency

Different assessments show varying allocations to institutional lending. LlamaRisk's October 12 assessment allocated 14.3% of backing to institutional lending against total reported backing of roughly $5 billion, while Blockworks Advisory's October 13 update put institutional lending at 8% of liquid cash as of September 30.

Ethena's lending dashboard describes collateral held with custodians, continuous LTV monitoring and no rehypothecation, but borrower rows and update times remained unpopulated in the November 1 text capture. For holders, a complete assessment would require combining the signing entity, outstanding amounts, collateral details, LTV ratios, concentration limits, and recovery prospects.