Ondo Finance, a leader in institutional-grade on-chain finance, is excited to announce the launch of USD Yield (USDY), the world’s first tokenized note secured by US Treasuries and bank deposits. USDY provides similar accessibility and utility as stablecoins while paying token holders a yield—5% APY at launch—and offering significantly enhanced investor protections.

The debut of USDY follows Ondo Finance’s entry into the tokenization space earlier this year with OUSG (Ondo Short-Term US Government Bond Fund), the first-ever on-chain US Treasuries product. With over $160 million in assets, OUSG has garnered substantial interest, but it is exclusively accessible to institutional investors.

“Crypto is all about financial inclusion, and we are thrilled to offer a yield-bearing product with mature financial structuring and investor protections to both individual and institutional investors. USDY will expand the universe of investors seeking to save and spend in a more global and digitally-native manner by sharing the yield and providing improved transparency and security over conventional stablecoins,” said Nathan Allman, CEO of Ondo Finance.

USDY is senior secured debt issued by Ondo USDY LLC, a US-domiciled specialty purpose vehicle, managed by a Board including an independent director, and designed to maximize bankruptcy-remoteness. USDY is over-collateralized by a roughly 3% first loss equity position that absorbs short-term fluctuations in US Treasuries prices.

Ankura Trust will serve as the Verification Agent and Collateral Agent to USDY in accordance with the underlying governing documents. Ankura Trust will post daily reports starting 60 days after launch that will provide transparency into the assets of the issuer for the benefit of lenders. As Collateral Agent, Ankura will be prepared to seize the assets that secure the tokens and repay holders if Ondo was to cease operations or breach certain covenants of the debt, subject to approval from USDY holders. This structure ensures a degree of transparency and investor protection that traditional stablecoins lack.

About Ondo Finance

Ondo Finance is dedicated to enhancing the safety, efficiency, and accessibility of financial services through institutional-grade on-chain offerings. Ondo Finance has a technology arm focused on developing on-chain financial software and an asset management arm that creates and manages tokenized products.

Photo by Katie Moum on Unsplash

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