Ondo USDY’s profit coin expands to Arbitrum

Ondo Finance, a real-world asset (RWA) protocol, is expanding access to Ondo's US dollar yield token (USDY) to Arbitrum, the Ethereum Layer-2 scaling network, in a blog post on August 27.

Ondo USDY is a product token designed to allow users up to 5.35% annual percentage returns as USD Coin (USDC) returns. Each USDY token is backed by bank deposits and short-term treasury bills, Ondo said.

The launch “pav[es] It's a way for some of the largest decentralized finance applications to use US Treasuries holding our token, said Kathy Wheeler, Vice President of Ondo Partnerships, in a statement.

USDY's total value is locked at $364 million and is available on eight blockchain networks, including Ethereum and Solana. In addition, Ondo offers another tokenized treasury product, Ondo Short-Term U.S. Government Treasuries (OUSD).

Related: Exclusive: Franklin Templeton Brings RWAs to Ethereum, User-Managed Wallets

Tokenized treasury products designed to mimic the low-risk yield of traditional money market funds or high-yield savings accounts are proliferating on blockchain networks.

According to research from RWA.xyz and Cointelegraph, the total market capitalization for tokenized treasury products has increased by 150%. It is predicted to reach $3 billion in total market capitalization by the end of 2024.

According to data from RWA.xyz, the largest players among tokenized money market products are BlackRock Dollar Institutional Digital Liquidity Fund and Franklin OnChain US Government Money Fund (FOBXX) with $509 million and $428 million in market capitalization, respectively.

Arbitrum has been gaining momentum in tokenized RWAs, including tokenized treasury yield products. In the year On August 8, asset manager Franklin Templeton announced that it is expanding FOBXX to Arbitrum.

Ondo operates from the United States, and is subject to USDY Regulation S. Therefore, USDY is not available to US investors and cannot be transferred for 40 days.

Collectively, tokenized RWAs represent a $30-trillion market opportunity globally, Colin Butler, Polygon's global head of institutional capital, told Cointelegraph in an interview.

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