Galaxy Digital has announced the successful closing of Galaxy CLO 2025-1, its first-ever collateralized loan obligation (CLO), marking a milestone in the evolution of onchain credit markets. The new issuance is tokenized on the Avalanche blockchain and will support Galaxy’s lending activities, bringing a familiar institutional credit structure fully onchain for the first time.
A key anchor investor in the transaction is Grove, which committed approximately $50 million to the CLO. Grove operates as an institutional-grade credit infrastructure protocol within the Sky ecosystem, formerly known as MakerDAO, and was incubated by Grove Labs, a subsidiary of Steakhouse Financial. The allocation reflects growing institutional confidence in blockchain-enabled credit structures that maintain traditional risk and governance standards.
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Chris Ferraro, President and Chief Investment Officer at Galaxy, said the transaction highlights the firm’s ability to bring together debt capital markets expertise, blockchain technology, and asset management capabilities. He noted that tokenizing a CLO opens new avenues for institutional participation in credit markets by improving efficiency, transparency, and collateral flexibility through onchain execution.
The CLO is financing an uncommitted credit facility provided to Arch Lending, a Galaxy Ventures-backed platform offering consumer loans overcollateralized with Bitcoin, Ethereum, and other digital assets. Proceeds from the CLO are being used to acquire outstanding loans under the Arch facility, with approximately $75 million financed to date. As additional loans are originated, the structure is designed to scale up to a total size of $200 million.
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This transaction reflects Galaxy’s broader strategy to expand its lending and asset management capabilities through the debt capital markets, using structures familiar to institutional investors. By leveraging its experience as both a lender and fiduciary, Galaxy aims to provide a repeatable blueprint for capital-efficient lending while giving investors access to innovative, digitally native credit products.
Sam Paderewski, Co-Founder of Grove Labs, described the deal as a meaningful step forward for onchain credit. He emphasized that the transaction demonstrates how traditional securitization structures can be brought onchain without sacrificing institutional standards, while reinforcing Grove’s role in enabling compliant, large-scale credit issuance on blockchain infrastructure.
The CLO’s debt tranches were issued and tokenized on Avalanche by INX, enabling efficient, low-cost trading. The tokens are expected to be listed on INX’s ATS platform, providing qualified investors with regulated market access. The CLO carries a senior coupon of SOFR plus 570 basis points, with an initial stated maturity in December 2026 and monthly distributions.
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By tokenizing the CLO, Galaxy is advancing the onchain private credit market, unlocking benefits such as faster settlement, enhanced transparency, improved potential liquidity, and greater collateral efficiency. Galaxy’s Lending and Digital Infrastructure teams structured and tokenized the offering, while Galaxy Asset Management is issuing and managing the CLO.
Anchorage Digital Bank serves as bond trustee and qualified custodian, acting as collateral and administrative agent through its Atlas Settlement Network to enable real-time collateral monitoring and secure onchain settlement. Fund administration services are being provided by NAV Consulting, Inc.
Galaxy also partnered with Accountable, which delivers continuous, real-time visibility into loan performance and collateralization through an interactive dashboard. This added layer of transparency gives investors clearer insight into credit risk, helping address information gaps that have historically challenged credit markets.
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