Ondo Launches Tokenized US Treasuries and Bonds to Capture the $100 Billion Stablecoin Market

Ondo Launches Tokenized US Treasuries and Bonds to Capture the $100 Billion Stablecoin Market

GREENWICH, Connecticut, January 11, 2023 Ondo Finance today announced the launch of a tokenized fund allowing stablecoin holders around the world to invest in US Treasury bonds and bills. The fund aims to bridge the growing gap between on-chain and off-chain returns, a potentially attractive opportunity for investors who hold over $100 billion in stablecoins, for which they currently receive no returns.

Today, crypto investors are being presented with a relatively unattractive set of yield opportunities. The most proven protocols, such as Compound and Aave, offer a return of around 1-2% per year. While newer unsecured loan protocols offer yields in the 7-10% APR range, these loans have experienced higher than expected default rates and are proving to be less transparent and riskier than many traditional bonds in the comparable returns. At the same time, due to an inverted yield curve and the possibility of the fed funds rate rising above 5%, short-term Treasuries are a particularly attractive asset.

” The crypto market desperately needs low-friction access to traditional capital markets. Large stablecoin holders, including start-ups and DAOs, must choose between suffering the erosion of their purchasing power by inflation or taking too much risk with the current range of on-chain yield offerings says Nathan Allman, Founder and CEO of Ondo Finance. ” We’re excited to bring high-quality, institutional-grade offerings like our tokenized US Treasuries to market. »

The fund will process daily subscriptions and redemptions in stablecoins as well as traditional fiat currency, and investors will receive tokens on the Ethereum blockchain that will represent their ownership. These tokens will be transferable between the addresses of whitelisted investors, as well as any smart contract that has passed a compliance review. Ondo wants investors to use smart contracts to engage in on-chain trading and lending using the fund’s tokens, alongside traditional cryptoassets.

The fund will have three tokenized classes, each investing in a single Blackrock or PIMCO ETF. Ondo will manage the fund, while Clear Street will act as prime broker and qualified securities custodian, Coinbase as qualified stablecoin custodian, NAV Consulting as fund administrator and Richey May as fund auditor.

About Ondo Finance

Ondo’s mission is to provide institutional-grade, blockchain-based investment products and services. Ondo has a technology division that develops decentralized finance technology as well as an asset management division that creates and manages tokenized funds.