Ondo Monthly Spotlight: February 2024

Ondo Monthly Spotlight: February 2024

Welcome to the Monthly Spotlight from Ondo Finance, where we delve into the latest developments from the forefront of real-world asset (RWA) tokenization.

This month, we unveiled Ondo Global Markets (Ondo GM), a platform bringing existing securities with deep liquidity like public equities and fixed income onchain. We also announced our venture on two promising networks, Sui and Aptos, embodying our strategic expansion and marking significant progress in our mission to democratize access to institutional-grade financial products.

February Spotlights ⬇️

  1. 🌍 Ondo Global Markets
  2. 💧 Sui Partnership
  3. ⚫️ Aptos Partnership
  4. 🌊 Goldman Sachs Alum Joins Ondo
  5. 🌐 Ondo Ecosystem Expansion
  6. 🎂 OUSG Turns One
  7. 🏔️ Ondo at ETHDenver

🌍 Ondo Global Markets - A New Paradigm for Securities Tokenization

We’re delighted to unveil Ondo GM, a platform that will include a broker-dealer with accounts at traditional trading, clearing, and settlement venues that will, in addition to accepting client orders via API and web app, also accept orders via smart contract call and/or token transfer. Permissioning for clients to be able to make those orders will be granted as blockchain tokens (analogous to API keys).  

The biggest challenge in tokenizing real world assets (“RWAs”) is liquidity. 

For years, the RWA space was focused on tokenizing illiquid assets like newly originated private credit (e.g., uncollateralized loans to crypto market makers). While there may have been some value in providing direct access to these opportunities for stablecoin holders, the tokenization of the loans itself served little purpose. 

These assets are mostly buy-and-hold; they are too bespoke and hard-to-price for deep secondary markets to emerge, both on- and offchain. Given the lack of secondary market liquidity, these assets don’t make great collateral for onchain lending, derivatives, or other protocols.

Approximately one year ago we launched OUSG, the world’s first tokenized US Treasuries product, which wrapped a BlackRock Treasuries ETF. We launched OUSG in part out of a belief that the RWA space should focus on tokenizing assets with deep existing liquidity, as those assets would make better collateral in DeFi. 

Around the same time, we developed Flux Finance, a lending protocol supporting OUSG collateral, to showcase some of this utility. Flux is effectively an implementation of US Treasury repo markets that is autonomous, global, transparent, and accessible to all stablecoin holders. OUSG and Flux have been an early success with over $200M in combined assets. We have since expanded to other forms of tokenized US Treasuries with slightly different target demographics and use cases, including OMMF, our tokenization of money market funds focused partly on institutional settlement, and USDY, our yield-bearing substitute for conventional stablecoins. Continue reading.

💧 Navigating New Waters: Ondo's Wave of Tokenization Meets Sui's Expanding Sea

Ondo Finance is thrilled to announce a groundbreaking partnership with Sui, bringing our premier tokenized US Treasuries product, USDY, natively onto the Sui network. This collaboration is set to enhance the accessibility of Real World Asset (RWA) products within Sui's rapidly expanding ecosystem, known for its significant strides in decentralized finance (DeFi).

In less than a year, Sui has emerged as a top 10 DeFi blockchain, showcasing a remarkable 1000% jump in Total Value Locked (TVL) over just four months. This surge underscores Sui's remarkable potential and highlights the community's dedication to addressing real-world challenges with innovative DeFi solutions, showcasing its valuable contributions alongside other established blockchains.

Sui aligns with Ondo's mission to democratize access to institutional-grade financial products. Sui's mainnet is engineered for exceptional transaction throughput and scalability, thanks to its distinctive object-centric architecture and a delegated proof-of-stake consensus mechanism. Sui swiftly and efficiently processes transactions, providing a fast, high-throughput, and cost-effective platform for USDY. Continue reading.

⚫ Ondo Finance and Aptos Foundation Forge Strategic Partnership to Tokenize Real World Assets

Ondo Finance and Aptos Foundation Forge Strategic Partnership to Tokenize Real World Assets

Ondo Finance and Aptos Foundation have announced a strategic partnership aimed at revolutionizing the integration of real world assets (RWAs) with blockchain technology. This partnership not only signifies a major step forward in blockchain finance but also brings together two organizations with impressive institutional pedigrees and partnerships, including ties to Blackrock and Goldman Sachs.

The collaboration is beginning with the native integration of Ondo's tokenized US Treasuries product, USDY, onto the Aptos blockchain, setting the stage for a series of innovative financial products that leverage the unique strengths of both organizations. USDY currently exists natively only on Ethereum, Solana, and Mantle.

Looking beyond the immediate integration, Ondo is exploring innovative solutions that combine onchain native and real world asset yields on Aptos. This includes developing new staking and re-staking processes that enhance the utility of tokenized assets and the capital efficiency of the platforms that support them. Continue reading.

🌊 Ondo Finance expands Risk and Compliance team, adding additional Goldman alum

We’re thrilled to announce that Chris Tyrrell has joined Ondo Finance as our new Chief Risk and Compliance Officer. Having previously worked with Nathan and Justin at Goldman Sachs, Chris Tyrrell served as Americas CCO at Blockchain.com and was most recently Chief Compliance Officer at the crypto exchange EDX Markets, which was founded by Citadel and Fidelity. Welcome to the team, Chris!

Ondo Finance, a leading player in onchain finance, today announced it had hired Chris Tyrrell as its Chief Risk and Compliance Officer. Mr. Tyrrell was previously the Head of Digital Assets Compliance and Head of Data Management Risk at Goldman Sachs and joins fellow Goldman alumni Justin Schmidt, President, and Nathan Allman, CEO, at Ondo.

Ondo currently offers three tokenized products: OUSG, providing exposure to US Treasuries; OMMF, providing exposure to US money market funds; and USDY, providing a yield-bearing alternative to conventional stablecoins. Together, they enable investors from around the world to gain exposure to key US-based asset classes in tokenized form.

In addition to being a leading provider of tokenized US Treasuries and Money Market Funds, Ondo has designed its products with improved compliance and risk management at their core. For example, Ondo’s technology that runs the Flux Protocol is a decentralized lending protocol that enables processes to respect an underlying asset’s permissions, including mandatory KYC. Continue reading.

🌐 Ondo Ecosystem Expansion

The Ondo Ecosystem Directory – A list of the institutions, protocols, and networks aligned with our mission of delivering institutional-grade financial products onchain, continues to expand. Notably, BitGo extended their custody support to encompass two Ondo tokens, USDY, and OUSG. 

Ondo Finance is delighted to announce our strategic partnership with BitGo, as they extend their custody support to encompass two Ondo tokens, Ondo US Dollar Yield (USDY), and Ondo US Short-Term Government Bond Fund (OUSG).

Safekeeping one's assets, commonly referred to as "custody" by institutional investors, plays an indispensable role for numerous crypto hodlers. Members of Ondo Finance's management team take immense pride in their 2018 investment in BitGo, a pioneering regulated crypto custodian and infrastructure provider. 

BitGo is now extending its custodial services to include USDY and OUSG, with USDY soon to be supported in Go Network, which allows institutions the ability to delegate assets to integrated exchange partners as collateral. This collaboration dovetails with the surging market interest in institutional-grade tokenized cash equivalents from both traditional and crypto-native financial institutions. Together, we are addressing this rising market demand by providing best-in-class solutions tailored to our clients’ needs. Continue reading.

🎂 OUSG Turns One: Transforming Finance with Onchain Risk-Free Assets

February 2023 marked a pivotal moment for the onchain world as we launched OUSG, the first widely adopted tokenized security. By providing exposure to BlackRock’s SHV ETF, OUSG seamlessly brought short-term US Treasury yield to the DeFi world, fostering transparency, efficiency, and broader access.

OUSG's inaugural year has been marked by significant achievements, underscoring its impact on the onchain economy:

  • Growth in Total Value Locked: OUSG has witnessed impressive growth in TVL, sitting at $110.65M
  • Expansion of Token Holder Base: The OUSG community has expanded, made up of a diverse group of individual investors, DeFi aficionados, and institutional players
  • Stability and Security: In a landscape marked by volatility, OUSG has proven to be reliable
  • Compliance and Transparency: OUSG was designed with a heavy emphasis on regulatory compliance and transparency, setting the gold standard for this emerging industry
  • Composability with DeFi Protocols: OUSG is composable with protocols that support permissioned tokenized securities, such as Flux Finance, which enables OUSG to be used as collateral to borrow stablecoins

OUSG is available to both US and non-US institutional and individual Qualified Purchasers. Investors receive tokens representing fund ownership, which are freely transferable between qualified parties. Subscribing to OUSG requires KYC and AML procedures and begins by submitting your interest at: ondo.finance/ousg

🏔️ ETHDenver

The Ondo Team is making waves at ETHDenver, with four team members in attendance – Interested in our products? Eager to collaborate? Want to work with us? Reach out if you’d like to connect!

Catch Justin Schmidt today at 3:55pm on the Main Stage for “Can RWAs Survive the Bull Market This Time?”, alongside Asad Khan, Sidney Powell, Kaledora Kiernan-Linn, and Crystal Kim. Continue reading.