Saturday, June 22, 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,” based on 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 stated in an interview.

The event comes as demand for tokenized variations of conventional monetary devices corresponding 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 belongings (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 group and ruled by a decentralized autonomous group (DAO) by neighborhood votes, lets traders take out loans by pledging OUSG as collateral. It has $44 million of whole worth locked on the platform, based on DefiLlama.

Ondo’s transfer follows asset administration large Franklin Templeton, which made its tokenized Franklin OnChain U.S. Authorities Cash Fund (FOBXX) obtainable 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 quicker than on the mainnet, which is susceptible 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,” stated Colin Butler, world head of institutional capital at Polygon Labs.

Edited by Nelson Wang.

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