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Wednesday, February 28, 2024

Extra Tokenized Treasurys Arrive on Polygon as Digital Bond Market Expands

Ondo Finance, which already presents tokenized U.S. Treasurys on the Ethereum blockchain, expanded the product to the Polygon community.

The corporate has issued its OUSG token, a tokenized model of BlackRock’s short-term U.S. authorities bond exchange-traded fund (ETF), natively on Polygon as a part of a “strategic alliance,” in response to a press launch Thursday.

The agency additionally plans to convey its upcoming yield-generating stablecoin different, which is a tokenized cash market fund known as OMMF, in addition to the Ondo-developed decentralized lending market Flux Finance – pending governance approval – to Polygon, Ondo President and Chief Working Officer Justin Schmidt mentioned in an interview.

The event comes as demand for tokenized variations of conventional monetary devices akin to U.S. Treasurys is rising amongst traders, as bond yields have surpassed charges in decentralized finance (DeFi) lending markets. Wealth administration agency Bernstein forecast that tokenization of real-world property (RWAs) might develop to $5 trillion in market worth within the subsequent 5 years.

Tokenized Treasurys has grown to a $600 million market, with Ondo Finance’s OUSG token claiming a big share of $140 million since its inception in January. Flux Finance, developed by Ondo’s workforce and ruled by a decentralized autonomous group (DAO) by means of group votes, lets traders take out loans by pledging OUSG as collateral. It has $44 million of whole worth locked on the platform, in response to DefiLlama.

Ondo’s transfer follows asset administration large Franklin Templeton, which made its tokenized Franklin OnChain U.S. Authorities Cash Fund (FOBXX) accessible on Polygon after releasing it on Stellar in 2021.

Polygon is a layer-2 scaling community of Ethereum that enables customers to transact extra cheaply and sooner than on the mainnet, which is liable to clogging throughout occasions of excessive blockchain exercise, whereas nonetheless counting on Ethereum’s safety.

“Ondo Finance constructing on Polygon is an important step towards bridging the hole between DeFi and institutional-grade finance,” mentioned Colin Butler, international head of institutional capital at Polygon Labs.

Edited by Nelson Wang.


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