Galaxy accesses onchain liquidity through Morpho for institutional borrowing
“Morpho provides efficient, onchain access to BTC/ETH-backed liquidity with transparent and auditable risk parameters. It’s a useful tool for managing stablecoin liquidity across desks.”Max Bareiss, Head of Lending at Galaxy
The Opportunity
Galaxy operates institutional trading and lending businesses that demand 24/7 access to stablecoin liquidity against blue-chip collateral, without sacrificing transparency, control, or operational rigor. As Galaxy scales its global trading operations, onchain sources of stablecoin liquidity serve as one of several mechanisms to enhance flexibility and efficiency in financing inventory and managing cross-desk balances.
The Approach
BTC/ETH-backed borrowing on Morpho
Galaxy utilizes Morpho to collateralize blue-chip assets, such as BTC and ETH, to borrow stablecoins. Each market on Morpho is configured per asset with its own LLTV and interest model, allowing Galaxy to optimize borrowing terms according to collateral type and market conditions.
Moreover, Morpho is the default lending network for some of the biggest “DeFi Mullet” integrations from leading fintechs, including Coinbase, Gemini, Crypto.com, Ledger, and Trust Wallet, which provide deep liquidity for borrowers such as Galaxy.
Immutable, transparent, and auditable risk parameters
Every Morpho Market has only five variables: loan asset, collateral asset, LLTV (liquidation LTV), interest rate model, and oracle, all visible and immutable at market creation. Neither Morpho DAO nor anyone else can change the market’s parameters. Galaxy’s risk and operations teams can verify oracle sources and parameterization onchain, aligning liquidity usage with internal controls and external audit requirements.
Isolated market design to contain risk
Morpho’s isolated architecture contains risks to a single market (e.g., cbBTC/USDC, WETH/USDC, and so on) rather than being pooled across all assets on a given chain. That means adverse events are isolated to a single market’s lenders/borrowers and do not have contagion risk. This isolation complements Galaxy’s broader institutional risk management practices.
The Results
Accessing liquidity through Morpho enables Galaxy to efficiently source stablecoins at competitive rates, supporting its trading activity. With collateral posted onchain and immutable parameters set per market, Galaxy can instantly draw stablecoin liquidity to finance trading inventory and manage balances across desks, while preserving control over collateral and maintaining full transparency into rates, utilization, and liquidation thresholds.
In practice, this helps Galaxy gain more elastic funding at competitive onchain rates, compressing the cost of capital and transferring those efficiencies into tighter OTC pricing and more responsive liquidity for institutional counterparties, all within an isolated-risk framework that risk teams can review, monitor, and audit directly onchain.