Key Takeaways
Ondo is a financial platform that tokenizes real-world assets (RWAs), such as U.S. treasuries, and provides on-chain access to institutional-grade finance.
The platform features an asset management arm that creates tokenized investment products and a technology arm that develops DeFi protocols that operate independently.
Ondo offers tokenized products like USDY (U.S. Dollar Yield Token) and OUSG (Ondo Short-Term U.S. Treasuries). USDY is backed by U.S. treasuries and generates yield, while OUSG offers direct exposure to short-term treasury securities.
The ONDO token serves as a governance and utility token across the ecosystem. Holders can participate in the Ondo DAO and influence the future of Ondo’s protocols.
What Is Ondo?
Ondo is a financial platform that tokenizes real-world assets (RWAs), such as U.S. treasuries, and brings them on-chain. Its goal is to provide you with easier access to financial products that were previously limited to large institutions.
Ondo has two main components:
Asset management: The part of Ondo that creates and manages tokenized products, such as USDY (U.S. Dollar Yield Token) and OUSG (Ondo Short-Term U.S. Treasuries).
Technology: The division of Ondo that designs and maintains decentralized protocols enabling services like lending and borrowing with both permissioned and permissionless assets.
This dual structure enables Ondo to serve investors seeking exposure to low-risk RWAs and developers looking to integrate tokenized assets into financial applications.
How Ondo Works
Ondo works by taking traditional assets like U.S. treasuries and tokenizing them so they can exist on-chain. Instead of going through banks or brokers, investors can deposit stablecoins such as USDC and receive tokenized products in return. These tokens represent their share of the underlying investments and generate yield as those assets earn returns.
USDY (U.S. Dollar Yield Token)
USDY is a token backed by short-term U.S. treasuries and bank deposits. It functions like a stablecoin with an added yield. As of August 2025, only non-U.S. users and institutions are eligible to purchase USDY, and after a waiting period, the tokens become transferable on-chain.
USDY comes in two versions: an accumulating version (USDY), where the token’s price changes based on accumulated yield, and a rebasing version (rUSDY), where the price remains fixed at $1 but new tokens are issued to represent the yield.
OUSG (Ondo Short-Term U.S. Treasuries)
OUSG offers institutional investors tokenized exposure to U.S. treasuries and other government-backed securities. Like USDY, OUSG is available in accumulating and rebasing versions. The underlying portfolios are managed by leading asset managers such as BlackRock and Fidelity.
Investment process
The process for investing in USDY looks like this:
Onboarding: Before investing, users must complete a Know Your Customer (KYC) verification process, provide their wallet address, and sign the necessary documentation. This step ensures eligibility and compliance with regulations.
Depositing funds: Once approved, users can deposit USDC at any time. Larger deposits above 100,000 dollars can also be made via USD bank wires. Interest begins accruing once the funds are processed, which usually takes two to three business days.
Temporary certificate: Each purchase is placed into a cohort, which determines when the tokens can be issued. After funds are processed, investors receive a Temporary Global Certificate as proof of investment until the tokens are minted.
Token minting: At the end of the 40 to 50-day waiting period, USDY tokens are minted and delivered to the user’s wallet. From this point, the tokens can be freely transferred or traded in eligible regions.
Redemption: When redeeming, USDY can only be converted back into USD via bank wire to non-U.S. accounts.
Through this process, Ondo combines blockchain technology with trusted custodians and asset managers. What is normally a slow and complex process becomes a digital token that can be held, transferred, or used in decentralized finance (DeFi) applications just like other cryptocurrencies.
Ecosystem
Ondo Global Markets
Ondo has announced plans to launch Ondo Global Markets in the later part of 2025. The platform is designed to bring traditional investments, such as stocks and bonds, onto the blockchain through tokenization. Its initial focus is on providing non-U.S. investors access to tokenized shares of companies as well as exchange-traded funds (ETFs) from managers including BlackRock and Fidelity.
Ondo Chain
Ondo is developing Ondo Chain, a Layer 1 blockchain designed to bring institutional-grade finance on-chain. It allows tokenized assets to be borrowed, lent, staked, or used as collateral in the same way as cryptocurrencies. The network also supports the distribution of stablecoins backed by securities, automated portfolio management, and connections with both public and private blockchains.
While Ondo Global Markets focuses on tokenizing assets such as stocks and bonds, Ondo Chain provides the infrastructure for these assets to be utilized at scale. The network relies on trusted institutions as validators and incorporates features such as proof of reserves and a decentralized verifier network to ensure transactions remain transparent and secure. Validators can also stake real-world assets to help secure the network while earning additional yield.
Flux Finance
Flux Finance is a decentralized lending protocol created by Ondo. It is designed to operate independently, with its own application and governance managed outside of Ondo’s direct control. The protocol is built on Compound V2, one of the earliest lending platforms in the DeFi space.
Compound introduced the peer-to-pool model, where lenders deposit assets into shared liquidity pools and borrowers take loans from those pools by posting collateral as security. Flux builds on this model and extends it to support both open-access tokens, such as USDC, and permissioned tokens, like OUSG. This means lenders can earn interest on their stablecoins, while borrowers can access liquidity backed by high-quality collateral.
The protocol is governed by the Ondo Decentralized Autonomous Organization (DAO). This community-driven approach allows the protocol to operate independently while staying aligned with Ondo’s broader goal of making institutional-grade finance available on-chain.
ONDO Token
The ONDO token is the native governance and utility token of the Ondo ecosystem. It is used across Ondo’s protocols and ecosystem for a variety of purposes, including:
Governance: Token holders have the ability to pause markets, update oracle addresses, manage treasury funds, and control ONDO emissions to incentivize ecosystem growth.
Delegated voting: ONDO can be delegated to other participants for voting power, enabling broader involvement in shaping the ecosystem's direction.
Protocol management: ONDO holders can participate in the governance of Flux Finance and other Ondo-related protocols by voting on proposals, such as listing new assets, updating interest rate models, or managing protocol reserves.
ONDO is actively used within the Ondo DAO to govern Flux Finance, manage the treasury, and guide the growth of tokenized assets such as USDY. The Ondo Foundation continues to play a supporting role by connecting the DAO with real-world partners and helping ensure the ecosystem grows in line with its mission.
Closing Thoughts
Ondo Finance is developing products and tools that make real-world assets more accessible on-chain. Through tokenized offerings such as USDY and OUSG, investors gain on-chain access to yield-generating instruments that were once restricted to traditional markets. The team is also working on platforms like Ondo Global Markets and Ondo Chain, which aim to create the necessary infrastructure for real-world assets to be transferred and utilized at scale alongside cryptocurrencies.
Further Reading
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