The development of green and environmentally friendly lubricant additives is crucial in the field of friction. A green modifier, Cardanol polyoxyethylene ether xanthate (CPEOCS2K), was synthesized from natural cashew nut shells derived from Cardanol. Cu nanoparticles were prepared using a simple one-step reduction method, which involved modifying metallic Cu with CPEOCS2K. The long chains of the modifier on the surface of the nanocore interconnected to form a nano-network, and the resulting Cu nanochains exhibited excellent lubrication performance when applied to a water-ethylene glycol (EG) system as a lubricant additive. This encapsulated nanoparticle structure not only enhances the dispersion stability of the nanoparticles but also generates a chemically reactive film that adsorbs onto the wear surface during friction, thereby improving the lubrication effectiveness of the water-based lubricant. The use of natural organic compounds to synthesize modifiers enhances the environmental friendliness of metal nanoparticles as lubricant additives, and the outstanding lubricating performance demonstrates the potential of green lubrication technology.