Ondo USD Yield Token (USDY) Goes Live on Arbitrum: Introducing Real-World Assets to DeFi
The tokenized product protocol Ondo Finance announced yesterday that it is introducing its USD yield token USDY to the Ethereum L2 network Arbitrum, in order to further drive the practicality, scalability, and composability of real-world assets (RWA).
Ondo's USD yield token USDY enters the Cosmos blockchain
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What is USDY by Ondo?
USDY, launched last year by decentralized investment platform Ondo Finance, is a USD yield token collateralized by short-term US government bonds and bank savings accounts. It aims to provide investors with attractive returns similar to traditional finance and institutional-level investor protection measures.
USDY is reportedly available for purchase by non-US individuals and institutions, and claims to comply with the US Securities and Exchange Commission's Reg S regulations.
Learn more: ONDO soars 14x with RWA, is the USDY with returns more stable than stablecoins?
Currently, the total value locked (TVL) of USDY is $382 million, supporting eight blockchain networks, with an annual percentage yield (APY) of 5.35%.
Ondo USDY Expands to Arbitrum
A blog post by Ondo shows that USDY is now live on the Arbitrum network:
This integration brings our tokenized US government bond product into one of the largest DeFi ecosystems, continuing to expand Ondo's practicality and accessibility of real-world assets to the blockchain.
USDY is now available on major DeFi protocols on Arbitrum, including DEX Camelot and lending protocol Dolomite; users can trade and provide liquidity for USDY on the former, or deposit USDY on the latter, both earning USDY and protocol-specific additional returns.
Ondo: Paving the way for DeFi to combine with RWA
Ondo Finance's Vice President of Partnerships, Katie Wheeler, expressed excitement, stating that USDY will unlock new revenue streams for users in the Arbitrum ecosystem:
The growth potential of the Arbitrum ecosystem has been substantial, and given the composability of USDY and the growing trend in DeFi, this is a natural fit.
It appears that a collaboration has taken place, as the STEP committee of Arbitrum DAO decided two months ago to allocate $6 million worth of ARB tokens from its treasury to Ondo's USDY; this investment accounts for 17% of the total strategy funds, second only to BlackRock's BUIDL fund.
On the other hand, Arbitrum is actively seeking RWA business, as Franklin Templeton recently announced the integration of its FOBXX fund on the network.
RWA Market Trends
According to data from the tokenized asset analysis platform RWA.xyz, the main products and their market values in the tokenized investment market are:
- BlackRock's "USD Institutional Digital Liquidity Fund BUIDL": $509 million
- Franklin Templeton's "OnChain US Government Money Fund FOBXX": $428 million
- Ondo's "Tokenized US Government Bond and Deposit Note USDY": $330 million
RWA is hot! Coinbase Asset Management plans to launch a tokenized market fund
With traditional finance joining the RWA trend, Standard Chartered Bank predicts the market size to reach $30 trillion by 2034, compared to the current $11.7 billion market size.