Ondo Finance Introduces Ondo Bridge
Ondo Finance has partnered with Axelar to launch the Ondo bridge, a cross-chain solution inspired by Circle’s cross-chain transfer protocol. This bridge will facilitate the issuance of native tokens, including Ondo’s USDY, across different blockchain networks supported by Axelar.
USDY Tokenized Note
USDY is a tokenized note from Ondo that is backed by short-term U.S. treasuries and bank demand deposits. The goal is to streamline the movement of Ondo tokens, such as the newly introduced yield-bearing stablecoin USDY, across various blockchain networks.
Meeting the Demand for Stablecoins
Nathan Allman, founder and CEO of Ondo, emphasized the growing demand for better stablecoins across different web3 ecosystems. The Ondo Bridge allows them to meet this demand with a superior and safer yield-generating stablecoin.
Ondo’s Core Products
Ondo Finance’s main products are tokenized cash equivalents that provide yield backed by assets like U.S. treasuries and money market funds. They aim to offer users an alternative to stablecoins where holders earn the majority of the underlying asset yield rather than issuers.
Ondo’s Market Share and Total Value Locked
Ondo Finance holds approximately 50% market share in the tokenized securities niche and has legally structured USDY as a tokenized bearer instrument. The platform also has over $200 million in total value locked, according to DeFiLlama.
Axelar’s Cross-Chain Utilization
Axelar’s programmable cross-chain network will enable Ondo to manage USDY supply across chains by burning tokenized representations of its real-world assets on one chain to mint them on another. The integration will utilize Squid, a cross-chain liquidity router built on Axelar, to transfer USDY between certain chain pairs, including Mantle.
This integration ensures that tokens transferred between networks remain native and utilizes a “burn-and-mint” mechanism to avoid bridging risks associated with wrapped assets. Additionally, it will enable unified secondary market liquidity for traders to capitalize on token price arbitrage across various decentralized exchanges while maintaining price stability.
Hot Take: Embracing Cross-Chain Solutions for Stablecoins
The collaboration between Ondo Finance and Axelar to introduce the Ondo Bridge demonstrates an innovative approach to meeting the growing demand for stablecoins across different blockchain networks. By leveraging Axelar’s cross-chain network, Ondo aims to provide a superior and safer yield-generating stablecoin while maintaining price stability and ensuring seamless token transfers between networks.
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