Ondo Finance, a leading platform for tokenized U.S. Treasurys on the Ethereum blockchain, has now expanded its offerings to the Polygon network. The company recently launched its OUSG token, which is a tokenized version of BlackRock’s short-term U.S. government bond exchange-traded fund (ETF), on Polygon as part of a strategic alliance.
In addition to the OUSG token, Ondo Finance plans to introduce its upcoming yield-generating stablecoin alternative, known as the OMMF, and the decentralized lending marketplace Flux Finance to Polygon pending governance approval. This move comes as demand for tokenized versions of traditional financial instruments like U.S. Treasurys is on the rise among investors, with bond yields surpassing rates in decentralized finance (DeFi) lending markets.
The tokenized Treasurys market has grown to $600 million, with Ondo Finance’s OUSG token capturing a significant share of $140 million since its launch in January. Flux Finance, developed by Ondo’s team and governed by a decentralized autonomous organization (DAO), allows investors to take out loans by pledging OUSG as collateral, with $44 million of total value locked on the platform.
This expansion by Ondo Finance follows in the footsteps of asset management giant Franklin Templeton, which recently made its tokenized Franklin OnChain U.S. Government Money Fund available on Polygon after releasing it on Stellar in 2021. Polygon, a layer-2 scaling network of Ethereum, offers users faster and more cost-effective transactions compared to the mainnet, while still leveraging Ethereum’s security.
Colin Butler, global head of institutional capital at Polygon Labs, commented on Ondo Finance’s move to Polygon, stating that it is a crucial step towards bridging the gap between DeFi and institutional-grade finance. With the tokenization of real-world assets (RWAs) projected to reach $5 trillion in market value in the next five years, Ondo Finance’s expansion to Polygon signifies a significant milestone in the evolution of the digital asset space.
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