Originally published on: November 26, 2024
Ondo Finance, a leading tokenized real-world asset (RWA) protocol, has teamed up with LayerZero to enhance the accessibility of its flagship yieldcoin, USDY, across various blockchain networks. This collaboration allows users to seamlessly utilize USDY and its tokenized United States Treasurys product on multiple blockchain ecosystems without the need to mint new tokens or conduct asset swaps between chains.
By integrating LayerZero’s Omnichain Fungible Token (OFT) standard, Ondo establishes USDY as a compelling alternative to traditional stablecoins like USD Coin (USDC) and Tether (USDT). The USDY yieldcoin is now fully fungible across Ethereum, Mantle, and Arbitrum, with plans for integration into additional networks in the near future.
Designed to provide users with a 4.9% annual percentage return (APR), each USDY token is collateralized by bank deposits and short-term Treasury bills. With a total value locked (TVL) exceeding $450 million and availability on eight blockchain networks, including Ethereum and Solana, Ondo’s USDY has become a prominent player in the tokenized Treasury market.
In addition to USDY, Ondo offers another tokenized treasury product known as Ondo Short-Term US Government Treasurys (OUSD). LayerZero’s OST standard enables seamless cross-chain transfers by burning tokens on the source chain during omnichain transactions, ensuring a unified token supply across multiple networks without the need for asset wrapping or intermediary liquidity pools.
The tokenized Treasury market has witnessed significant growth in 2024, with a collective market cap of approximately $2.5 billion as of November 26. Ondo leads the sector with a TVL of $650 million, surpassing competitors like Securitize, Hashnote, and Franklin Templeton. These tokenized RWAs represent a substantial $30 trillion market opportunity globally, as highlighted by Polygon’s Colin Butler.
It’s important to note that USDY is not available to US investors and imposes a mandatory 40-day holding period before transfers can be initiated. The alliance between Ondo Finance and LayerZero sets the stage for enhanced interoperability and accessibility within the tokenized Treasury ecosystem, paving the way for further innovation and growth in the market.
