Ondo Finance Launches Innovative Layer-1 Blockchain for Tokenized Real-World Assets
New York, NY — In a significant development for the intersection of traditional finance and decentralized finance, Ondo Finance, the second-largest issuer of tokenized Treasuries, has announced plans to launch its own layer-1 blockchain. This initiative aims to facilitate the integration of tokenized real-world assets (RWAs) into the capital markets. The unveiling took place during the inaugural Ondo Summit, where the company shared its vision for the future of finance.
Dubbed Ondo Chain, this new blockchain has been specifically designed to adhere to institutional compliance standards while also harnessing the transparency and accessibility that public blockchains, such as Ethereum, offer. The network will utilize a system of permissioned validators to verify transactions and to ensure the accuracy of critical financial data, including asset prices and the backing of tokens. Furthermore, Ondo Chain will enable staking of tokenized RWAs and provide native bridging capabilities to enhance interoperability between different blockchains.
“Financial markets are overdue for an upgrade,” said Nathan Allman, CEO of Ondo Finance, in a statement. “We’re creating an ecosystem that bridges the best of traditional finance with blockchain technology.” This statement underscores the company’s commitment to innovating within the financial sector.
The announcement follows Ondo’s recent launch of a tokenization platform, which is designed to facilitate the placement of stocks, bonds, and funds onto blockchain infrastructure. The process of tokenization, which involves creating digital tokens that represent ownership of traditional assets on a blockchain, is rapidly gaining traction worldwide. A growing number of institutions and governments are exploring tokenization as a means to achieve operational efficiencies, such as faster settlements and broader accessibility for investors. Reports from McKinsey, BCG, 21Shares, and Bernstein suggest that the tokenized RWA market could potentially expand into the trillions of dollars over the course of this decade.
Recently, several prominent figures in finance have articulated their belief that tokenized RWAs represent the next frontier of financial innovation. Larry Fink, CEO of the asset management giant BlackRock, emphasized that bonds and stocks will inevitably be traded on blockchain rails in the future and has called upon U.S. regulators and policymakers to establish comprehensive rules for security tokens. Meanwhile, Vlad Tenev, co-founder and CEO of digital brokerage Robinhood, has suggested that tokenization could democratize access to private equity investments, which are currently restricted to accredited investors and the wealthy. He has also proposed regulatory changes to enable retail investors to participate in tokenized asset investments.
According to data from rwa.xyz, Ondo Finance stands as the second-largest issuer of tokenized U.S. Treasuries. The protocol’s offerings include the U.S. Dollar Yield (USDY) and Short-Term US Government Bond (OUSG) tokens, which boast market capitalizations of $385 million and $268 million, respectively.
