Despite the lack of volume and the bearmarket we have been facing for just over a year, the crypto ecosystem continues to evolve and offer new innovative products. This week, it is from Ondo Finance that we have some interesting news, with a proposal for ” tokenization » US Treasury bills and corporate bonds. In doing so, Ondo provides the opportunity to invest in traditional market stocks with his stable coins and grow them on the DeFi side.
Ondo Finance and tokenization
Ondo Finance is an investment fund that aims to democratize institutional financial products and services. Through several products developed in recent months, they have made a name for themselves among the biggest, gaining reputation.
But it is in recent days that there has been a lot of talk about them, launching the first service of tokenization of US government bonds and treasury bills (debt securities) throughEF extension. ETFs that are generally found in traditional finance on the side of giants like Blackrock or Pimco are now accessible on chain. Among other things, Ondo allows you to invest in DeFi with government or corporate bonds.
For this, Ondo will offer batches of securities (ETF), in the form of tokens, which can be acquired by depositing stablecoins on their protocol. Right now, of course, you have to go through a process KYC (identity verification) and be selected to use these services. Also, a minimum deposit of $100,000 it is imposed. A way to test their new technology, while preserving their ecosystem. Therefore, investors who come to buy these “tokenized” ETFs exposed to traditional markets, which are also called RWA extension to Real-world assetsthey expose themselves a lot less riskS (risk free), since here we are talking about government bonds and not assets launched by private individuals.
>> Safety is the basis! To keep yours vsryptos near you, trust Ledger (commercial link) <
Three tokens for 3 financial worlds
Three types of tokens will be offered by Ondo Finance:
- the $SHVaffiliated with short-term US government bonds, initially via one of the ETFs offered by Black rock approximately 4.62% APY (cumulative returns over the year) – Ondon-imposed fees, up to 0.15% per annum.
- the $MINTwhich in turn refers to short-dated corporate bonds, initially through PIMCO ETFs, around 5.45% APY fees.
- Finally the $HYGwhich is exposed to high yield corporate bonds, initially through another Blackrock ETF, around 8% APY – the fee.
These investments are not yet certified by the SEC, the equivalent of the AMF (Financial Markets Authority) in the United States, but they can already be insured by partner by Ondo.
We find on the one hand Via Chiaraprime broker of the fund that will hold the securities, on the other Coinbase case who will hold the stablecoins e CoinBase Premium which will take care of the conversions between stablecoins and fiat currencies, so-called government currencies (e.g. euros, dollars, etc.). We finally find NAV consultancy administratively e Richy May who will act as tax advisor and auditor.
Even if the accessibility of this service is currently limited, the goal remains to democratize chain savings, minor risksand to offer new investment opportunities with its stablecoins.
Finance more so Decentralized?
The services offered by Ondo are not unanimous as they deviate from the codes of Challenge. Indeed, on the one hand a KYC is imposed, the stablecoins deposited as collateral are then held by a trusted third party, therefore, the investments are placed under the eye of the regulators… But we will agree that we have everything here too of a new way to invest, involving a relationship risk/interest never seen before.
A feat that could encourage many DeFi projects to come and deposit stablecoins with Ondo to acquire tokens RWA extension to offer them to its users. An alternative solution that allows any investor to benefit from this innovation without going through a KYC. Note that RWA tokens issued by Ondo cannot be transferred between the hands of anyone or any protocol as smart contracts will be controlled and monitored.
Some protocols therefore hastened to request to be able to introduce these “risk-free” tokens on their platform, in order to offer a new, more attractive and secure investment method. And this is especially the case with Euler or Flux. When we imagine we can lend (loan) or even trader token from the traditional bond market, the investment possibilities then become numerous.
To summarize, we are here on an investment fund that integrates government and corporate bonds on blockchain networks. A novelty that introduces traditional financial stocks into the ecosystem of decentralized finance.
The innovation potential around this technology of tokenization stocks and bonds are huge. Beyond that, stablecoins and DeFi are taking a big step towards accessibility and democratization of a growing ecosystem. No offense to some, the bridge between traditional finance and decentralized finance is being built on a solid foundation.
In cryptocurrency, do not save on prudence! So, to keep your crypto assets safe, your best bet is still a personal hardware wallet. To the ledger, there is something for all profiles and all cryptocurrencies. Don’t wait to secure your capital (trade link)!