# Ethena Framework Sets Trading Team Route for Lending Counterparties

By John Kim

Canonical URL: https://www.tokenpost.com/news/business/47397
Published: 2026-11-03T06:11:02.000Z
Updated: 2026-11-03T06:11:02.000Z
Section: Business

> A committee member can flag a counterparty over a failed criterion, with a decision due within five business days; the framework sets no lending cap.

Kairos Research posted a lending framework to Ethena’s governance forum Oct. 29 that would let the protocol’s trading team onboard qualifying institutional counterparties without a separate Risk Committee vote, while preserving committee oversight.

The route depends on checks for recourse, jurisdiction and standing, sanctions screening, custody and daily collateral reporting. A counterparty must use a single signing entity with full recourse, or provide a parent guarantee if the parent backs the borrowing. Collateral must sit in a segregated tri-party account with an approved custodian, and Ethena must be able to verify reports each day. The review also covers insolvency and past findings involving fraud or client assets.

Ethena must deliver borrower documents to the Risk Committee privately at least three business days before initial funding. A committee member who flags a counterparty must identify which eligibility test it fails, and the committee must decide within five business days.

Loan-to-value rate cards would be shared with the committee each month, alongside monthly book reports from Ethena. A missed margin call, default or change in a counterparty’s standing would stop additional lending to that borrower and go to the committee within 48 hours. Five counterparties with earlier approval keep their status.

The collateral list covers Bitcoin (BTC), Ether (ETH), Solana (SOL), XRP, USDC and USDT, as well as cbBTC, WBTC, stETH and wstETH. Ethereum-based XAUT is eligible only if custody, sale venues and a weekend liquidation test meet the framework’s conditions. USDe, sUSDe, ENA, USDtb and collateral owned by the borrower are excluded.

USDe is a synthetic dollar backed by spot crypto assets, liquid stablecoins and derivatives positions that offset those holdings. At Sept. 30, institutional lending represented 8% of liquid cash. Liquid cash was listed at $3.7 billion, or 74% of $4.95 billion in total backing. FalconX joined as an institutional lending partner in August.

The framework sets no numerical cap for overall lending and no borrower concentration ceiling. It gives no effective date and names no counterparty approved or funded under the route.