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Mantle, one of the world’s largest DAO-led web3 ecosystems built around Ethereum layer 2 (L2) Mantle Network, announced today ahead of TOKEN2049 its entry into real world assets (RWAs) with Ondo Finance’s USD Yield ($USDY) token. $USDY has become the first project of Mantle Showcase, a program that highlights projects for their product-market fit and ability to bring the greatest benefits to the Mantle community. 

RWAs on blockchain have emerged as one of the use cases with the greatest potential to bring significant benefits for users. Mantle now expands into the RWA vertical with a focus to bring the best product experience to its community, having conducted careful research and significant due diligence. RWAs are expected to play a key role in helping bring sustainable yield into Mantle’s broader DeFi ecosystem. Having Ondo’s tokenized U.S. Treasuries (and other tokenized cash equivalents) is a crucial piece of the puzzle.

Ondo’s $USDY has been chosen as the inaugural Mantle Showcase project on the grounds of its potential to bring the greatest benefits to the Mantle community and provide the smoothest user experience, particularly in the following aspects:

  1. High-quality assets with sustainable yield. $USDY is the world’s first tokenized note secured by a combination of U.S. Treasuries and bank deposits (at large, established banks such as Morgan Stanley). Tokenholders receive a yield supported by these high-quality assets — currently at 5% APY.
  1. Focus on legal & regulatory compliance. To protect the capital of Mantle users, as well as that of Mantle’s own, it was deemed imperative to ensure a meticulous approach to compliance. With an emphasis on investor protection and having performed due diligence on the bankruptcy remoteness process implemented, $USDY distinguishes itself among tokenized RWAs in investor protection.
  2. Ease of access. $USDY is legally structured as a tokenized bearer instrument (similar to stablecoins). This means investors do not need to onboard with Ondo in order to acquire or trade $USDY in the secondary market. And even for those who wish to mint or redeem $USDY natively, Ondo’s onboarding process is automated and easy, and is available to nearly all non-U.S. individuals and institutions.
  3. Market leadership. Ondo is already a leader in the RWA space, with approximately 50% market share in tokenized securities. Ondo also popularized tokenized treasuries with its release of OUSG in February 2023 (currently at $160m in assets). Mantle sees $USDY as a first step in a broader partnership with Ondo to bring many diverse, quality RWAs to its ecosystem.

Users will be able to acquire $USDY both by onboarding with Ondo to mint new $USDY and by purchasing $USDY on decentralized exchanges (DEXs) on Mantle Network. A recently passed Mantle Governance proposal MIP-26 approved seed liquidity for RWA-yield-backed stablecoins — up to a combined allowance of 60M USDx. Consequently Mantle is expected to become the first blockchain ecosystem where $USDY will have material DEX liquidity, making it possible for any on-chain investor to easily buy and sell $USDY without having to onboard with Ondo. 

$USDY can be adopted as a de facto yield-bearing stablecoin throughout Mantle Ecosystem with the following as some potential use cases:

  • Collateral: $USDY can be employed as collateral for perpetuals/derivatives and lending protocols.
  • Automated Market Making (AMM): Utilizing $USDY as the “cash leg” in an AMM enhances the economic attractiveness of being an LP.
  • Payments/Settlement: $USDY made into a rebasing format where its value will stay pegged at $1.00, and interest will be paid via new token units, eliminating the accounting complexity of using $USDY for payments or settlement. 

“$USDY truly is a game changer for the world of DeFi — For the first time ever, users will be able to access U.S. Treasury yield straight from the tap and directly into their wallet, with a similar ease of access to stablecoins like USDT and USDC,” said Jordi Alexander, chief alchemist of Mantle.

“We’re incredibly excited to collaborate with Mantle in introducing $USDY to the market. We admire Mantle’s approach to putting substantial support behind a highly curated set of top-tier protocols and products to deliver the best possible cohesive on-chain ecosystem,” said Nathan Allman, Founder & CEO of Ondo. “We eagerly anticipate introducing other high-quality institutional-grade assets to the Mantle ecosystem in the future.”

About Mantle

Mantle Ecosystem comprises an Ethereum layer 2 (L2) — Mantle Network, a decentralized autonomous organization (DAO) — Mantle Governance, one of the largest on-chain treasuries — Mantle Treasury, and an upcoming Ether (ETH) liquid staking product — Mantle LSD: all built on Ethereum. Mantle token is the unified product and governance token of the ecosystem. 

Its first core product is Mantle Network, an Ethereum L2. Mantle Network strives to be compatible with the Ethereum Virtual Machine. The network’s modular architecture separates transaction execution, data availability, and transaction finality into modules — which can be individually upgraded and adopt the latest innovations. Mantle Network is the first L2 to partner with ETH restaking protocol EigenLayer for the data availability module. By adopting a rollup architecture, the network is secured by Ethereum. As the world’s first DAO-spawned L2, Mantle Network is pioneering a vision for the mass adoption of token-governed technologies. 

Its token ($MNT) powers the network as its native gas token and ecosystem growth token, and serves as the governance token of Mantle Governance. All future Mantle products will likewise be initiated by the Mantle token holder community through vote and powered by Mantle token.

About Ondo

Ondo Finance provides institutional-grade, blockchain-enabled investment products and services. Ondo has an asset management arm that creates and manages tokenized financial products as well as a technology arm that develops decentralized finance protocols and blockchain solutions.

Ondo’s first core products are tokenized cash equivalents that deliver very low risk, high quality yield from U.S. Treasuries, money market funds, and similar instruments, offering on-chain investors an alternative to stablecoins where holders rather than issuers earn the vast majority of the underlying asset yield. Ondo also developed Flux Finance, a DeFi lending protocol supporting tokenized treasuries as collateral, recreating treasury repo markets on-chain while creating on-chain utility for Ondo’s tokenized securities.

Photo by Guo Xin Goh on Unsplash

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