Mantle, a leading DAO-led web3 ecosystem centered around Ethereum layer 2 (L2) Mantle Network, and Ondo Finance, a pioneer in institutional-grade blockchain-enabled investment products, have unveiled the USD Yield ($USDY) token within the Mantle Ecosystem. This milestone follows the introduction of the Ethereum L1 to Mantle Network L2 bridge for $USDY, marking a significant stride in the convergence of decentralized finance (DeFi) and real-world assets (RWA).
$USDY is a tokenized note backed by real-world assets, specifically short-term U.S. Treasuries and bank demand deposits. Its unique structure allows $USDY holders to receive yield generated from the underlying assets in the form of an increasing redemption value, creating an accumulating token. The contract governing $USDY is an upgradeable ERC-20 token, enhancing its flexibility and adaptability.
With the introduction of a bridge from Ethereum L1 to Mantle Network L2, $USDY is now accessible through Mantle DEXs like Agni Finance and FusionX Finance. Additionally, users can mint and bridge $USDY onto Mantle Network through Ondo Finance, expanding the avenues for acquiring this innovative token.
Ondo Finance plans to introduce $mUSD, a rebasing wrapped version of $USDY exclusively within the Mantle Network. This variant is meticulously designed to maintain a consistent peg to $1, ensuring stability in value. Interest accrued from the underlying assets will be distributed through new token units, offering a seamless user experience and bolstering investor confidence.
$USDY and its rebasing counterpart, $mUSD, hold significant potential within the Mantle Ecosystem. As legal tokenized bearer instruments, similar to stablecoins, they are freely tradable by holders on the Mantle Network. These tokens are poised to serve various functions, including collateral for perpetuals/derivatives and lending protocols, enhancing economic attractiveness for liquidity providers (LPs) as yield-bearing stablecoins in AMMs, and facilitating payments and settlements within the ecosystem.
Mantle Governance’s proposal MIP-26 has approved seed liquidity for RWA-yield-backed stablecoins, allowing for a combined allowance of 60M USDx stablecoins. This injection of liquidity into leading Mantle DEXs will create convenient and substantial liquidity for $USDY, paving the way for its seamless integration into DeFi applications.
Real-world assets on blockchain (RWA) have emerged as a game-changing use case, offering sustainable native yield and opening new avenues for financial innovation. Mantle’s strategic entry into the RWA domain underscores its commitment to providing a robust product experience for its community. The collaboration with Ondo Finance amplifies this vision, providing Mantle users with direct access to real-world U.S. Treasury yield from their crypto wallets.
“RWA is expected to play a key role in helping bring sustainable yield into Mantle’s broader DeFi ecosystem, and $USDY and $mUSD are crucial pieces of the puzzle,” emphasized Jordi Alexander, Chief Alchemist of Mantle. “We are thrilled to work with Ondo Finance to build a highly liquid and easily accessible ecosystem for $USDY and $mUSD to be used and traded just like any stablecoin, but with the added benefit of tapping into real-world U.S. Treasury yield right from the crypto wallet.”
Nathan Allman, Founder & CEO of Ondo, expressed excitement about the collaboration, stating, “There’s an exciting lineup of protocols integrating $USDY that we will be announcing over the coming months. The Mantle Ecosystem is quickly becoming a market leader in showcasing useful applications of RWAs.”
This partnership exemplifies the convergence of traditional finance and decentralized technologies, ushering in a new era where real-world assets seamlessly integrate into the digital asset landscape, providing enhanced opportunities and utility for users within the Mantle Ecosystem.
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