Republic Technologies said it plans to borrow up to $100 million through a convertible note to acquire more Ethereum (ETH) and run additional validators. The zero-coupon, two-year loan is secured by pledged ETH, starts with a 10% discount, and begins with a $10 million first tranche. Further funding slices would follow if ETH’s price falls and the collateral shrinks, as the firm seeks to expand its validator operations.
The financing is a short-term convertible note that can turn into shares at the lender’s option, giving Republic cash today without issuing new equity now. The note bears no interest for two years and is backed by a fixed pile of ETH, with an initial 10% discount defining the lender’s terms.
If ETH prices drop, Republic must top up collateral and may draw additional tranches, so the lender carries little credit risk while Republic retains the market price risk. The first payout is $10 million, with further slices contingent on collateral levels as ETH’s value fluctuates.
Each validator requires 32 ETH, and the company already operates its own set, planning to add more with the new capital. Expanding validators supports Ethereum’s security and enables Republic to sell staking services as part of its role as “a public gateway to Ethereum.”
Other institutions now have a live example of how to borrow against ETH, and more may copy the move as they evaluate similar structures.
Republic Technologies and its key role in the Ethereum market
The lender is shielded by the collateral and top-up rule, yet Republic absorbs any ETH price swings, keeping market exposure on its side. Extra validators add real computing power to Ethereum and give Republic scope to expand and monetize staking services.
Regulatory treatment remains unsettled, with questions over how the collateral is labeled and what identity checks apply; the release lists no permits.
Republic joins a growing group of public firms that hold ETH and plug into Ethereum. The next visible steps are the cash transfers and the launch of the new validators, though the firm has not yet said when those will happen.
