In the current Web3 field, RWA (Tokenization of Real-world Assets) is undoubtedly the hottest topic. From the Hong Kong Web3 Carnival to the Web3 legal circle, RWA has become a hot topic of discussion. As a relatively reliable and secure way of “issuing coins”, RWA has attracted the attention of many project parties and investors. In the RWA field of the United States, Ondo is a leading project. Recently, the U.S. Securities and Exchange Commission (SEC) met with it to discuss a compliant issuance plan for tokenized securities, which has added a brilliant stroke to its development. An in-depth analysis of Ondo’s RWA model can help us understand the gameplay and development trends of RWA in the United States.
The key for Ondo to stand out in the RWA field lies in its innovative model. While many projects are still struggling with choosing which real assets to list and issue tokens for financing, Ondo has brought high-quality assets such as US Treasury bonds and money market funds onto the blockchain and integrated them into DeFi gameplay. Take its issued Token USDY (Ondo US Dollar Yield Token) as an example. This token is backed by short-term US Treasury bonds and bank deposits and has two significant advantages: First, it has solid income support. USDY is essentially a yield-based stablecoin, and investors can enjoy the income brought by US Treasury bonds or bank deposits every day. Second, transparency and security are guaranteed. Its underlying logic, such as custody, auditing, and revenue distribution, follows the compliance standards of traditional finance.
Furthermore, USDY adopts a bankruptcy isolation structure, with reserve assets separated from the issuer. In extreme circumstances, investors have the priority right to claim reserve assets. OUSG, a fund pegged to short-term US Treasury bonds issued by Ondo, has a similar logic to USDY. Essentially, Ondo seems to have migrated traditional financial wealth management products and clearing mechanisms onto the chain, endowing assets with on-chain liquidity while ensuring returns and controlling risks.
To further enhance asset liquidity, the Ondo team launched Flux Finance, an exclusive lending protocol for RWA. Unlike common lending protocols, Flux enables users to use tokenized Treasury bonds (such as OUSG) as collateral to lend out stablecoins like USDC. In response to the issue that the securities nature of government bonds may violate US regulations, Ondo adopts a licensing system and ensures through compliance reviews that only qualified investors can participate in lending, avoiding the disorderly state of asset collateral in DeFi and setting a model for the compliant development of on-chain RWA + DeFi.
In terms of infrastructure construction, Ondo also performed well. The self-built Ondo Chain is specifically designed for RWA. It adopts the permission-based validator model and introduces traditional financial institutions such as Franklin Templeton and WisdomTree as network nodes to ensure network security and compliance. The open application layer enables developers to issue RWA tokens and develop Dapps on the chain. Built-in oracles and cross-chain Bridges allow verification nodes to directly feed data such as asset prices and interest rates on the chain.
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