Ondo Finance to Launch Layer-1 Blockchain for Tokenized Real-World Assets
Company Aims to Connect Traditional Capital Markets with Decentralized Finance
Ondo Finance, the second-largest tokenized Treasuries issuer, announced plans to launch its own layer-1 blockchain designed for tokenized real-world assets (RWA) at its inaugural Ondo Summit in New York City. The company aims to bridge the gap between traditional capital markets and decentralized finance (DeFi) by creating an ecosystem that combines the benefits of both.
Ondo Chain: A New Blockchain for Tokenized RWA
Ondo Chain is designed to meet institutional compliance standards while maintaining the transparency and accessibility of public blockchains like Ethereum. The network will rely on permissioned validators to verify transactions and ensure accurate financial data, such as asset prices and token backing. It will also support staking of tokenized RWA and native bridging between blockchains for interoperability.
CEO’s Vision
“Financial markets are overdue for an upgrade,” said Ondo CEO Nathan Allman. “We’re creating an ecosystem that bridges the best of traditional finance with blockchain technology.”
Tokenization: A Growing Trend
Tokenization, or the creation of digital tokens that represent ownership of traditional assets on a blockchain, is gaining traction globally. Institutions and governments are increasingly exploring the process in pursuit of operational efficiency gains like speedier settlements and broader investor accessibility. The tokenized RWA market could grow to trillions of dollars through this decade, according to reports from McKinsey, BCG, 21Shares, and Bernstein.
Influential Leaders’ Views
Recently, several influential leaders in the financial world have touted tokenized RWAs as the next frontier of financial innovation. Larry Fink, CEO of asset management behemoth BlackRock, said bonds and stocks will be traded on blockchain rails in the future and urged U.S. regulators and policymakers to create rules for security tokens. Vlad Tenev, co-founder and CEO of digital brokerage Robinhood, said tokenization could democratize access to private equity investment, which is currently limited to accredited investors and wealthy individuals, and proposed rule changes to unlock tokenized asset investments for retail investors.
Ondo Finance’s Progress
Ondo Finance is the second-largest issuer of tokenized U.S. Treasuries offerings, according to rwa.xyz data. The protocol’s U.S. Dollar Yield (USDY) and Short-Term US Government Bond (OUSG) tokens stand at $385 million and $268 million market capitalization, respectively.
Timeline for Adoption
Allman believes that with a new administration in place, it could take two to three years to achieve meaningful adoption for tokenized RWA.
Conclusion
Ondo Finance’s plan to launch its own layer-1 blockchain for tokenized RWA marks an exciting development in the world of DeFi and traditional finance. By creating an ecosystem that combines the benefits of both, Ondo aims to bridge the gap between institutional investors and retail investors, making it easier for anyone to access and participate in the tokenized RWA market. As the industry continues to evolve, it will be exciting to see how Ondo’s innovative approach shapes the future of financial markets.
FAQs
Q: What is Ondo Chain?
A: Ondo Chain is a new layer-1 blockchain designed for tokenized real-world assets (RWA). It aims to meet institutional compliance standards while maintaining the transparency and accessibility of public blockchains like Ethereum.
Q: What is the purpose of Ondo Chain?
A: Ondo Chain is designed to bridge the gap between traditional capital markets and decentralized finance (DeFi) by creating an ecosystem that combines the benefits of both.
Q: Who is behind Ondo Chain?
A: Ondo Finance, the second-largest tokenized Treasuries issuer, is behind Ondo Chain. The company aims to create an ecosystem that connects institutional investors and retail investors, making it easier for anyone to access and participate in the tokenized RWA market.
Q: When can we expect to see adoption of tokenized RWA?
A: According to Ondo CEO Nathan Allman, it could take two to three years to achieve meaningful adoption for tokenized RWA, depending on the progress of regulatory frameworks and market conditions.
