Tokenized real-world asset (RWA) platform Ondo Finance is increasing past the Ethereum mainnet to the Polygon community, the corporate stated Thursday.
The platform has issued its OUSG token, a tokenized model of BlackRock’s short-term U.S. authorities bond exchange-traded fund, natively on Polygon as a part of a “strategic alliance,” in line with a press launch.
The agency additionally plans to convey its upcoming yield-generating stablecoin various, 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, Justin Schmidt, president and chief working officer of Ondo, stated in an interview.
The event comes as demand for tokenized variations of conventional monetary devices similar to U.S. Treasurys is rising amongst buyers, as bond yields have surpassed charges in decentralized finance (DeFi) lending markets. Wealth administration agency Bernstein forecast that tokenization of RWAs may 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 $134 million since its inception in January. Flux Finance, developed by Ondo’s crew and ruled by a decentralized autonomous group (DAO) via neighborhood votes, lets buyers take out loans by pledging OUSG as collateral. It has $44 million of whole worth locked on the platform, in line with 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, international head of institutional capital at Polygon Labs.