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 interact with Ondo’s US Dollar Yield Token and tokenized United States Treasurys product on multiple blockchain ecosystems without the need to mint new tokens or swap assets between chains.
By integrating LayerZero’s Omnichain Fungible Token (OFT) standard, USDY emerges as a viable 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 to expand to more networks in the near future.
Offering a competitive 4.9% annual percentage return (APR), each USDY token is backed 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 tokenized Treasury products are gaining significant traction in the market.
In addition to USDY, Ondo also features another tokenized treasury product called Ondo Short-Term US Government Treasurys (OUSD). LayerZero’s OST standard facilitates omnichain transfers by burning tokens on the source chain, creating a unified supply across multiple networks without the need for asset wrapping or liquidity pools.
The tokenized Treasury market has experienced remarkable growth, with a collective market cap of around $2.5 billion as of November 26, 2024. Ondo stands out as the most popular tokenized US Treasury protocol, leading competitors such as Securitize, Hashnote, and Franklin Templeton with a TVL of $650 million.
According to Colin Butler, Polygon’s global head of institutional capital, tokenized RWAs represent a $30-trillion market opportunity globally. While USDY is not available to US investors and has a 40-day transfer restriction, its impact on the DeFi space is undeniable.
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