The leading tokenization firm's rapid expansion comes alongside a strategic deal with the trillion-dollar asset manager to provide intraday liquidity for its new U.S. Treasury fund.
Ondo Finance has secured $650 million in total value locked (TVL) through its tokenized U.S. Treasury products, marking a 120% quarter-over-quarter growth in Q3 that outpaced all major stablecoins.
"Tokenization is the fastest-growing category in crypto, and Ondo is at the forefront of this movement," said Justin Schmidt, Ondo executive, during the Federal Reserve Bank of Philadelphia's Eighth Annual FinTech Conference on October 23, where he spoke alongside representatives from Solana and Fidelity.
The firm's two flagship products—a stablecoin USDY at $443.1 million and a tokenized exchange-traded fund (ETF) OUSG at $205.3 million—have outpaced competitors, according to data from RWA.xyz. USDY and OUSG are secured by U.S. Treasury Bills and their yields, with current returns exceeding the average yield to maturity. Securitize follows at $534.2 million, with Franklin Templeton holding $410.4 million in tokenized Treasury assets.
According to Artemis research, USDY emerged as the fastest-growing asset compared to leading stablecoins in Q3, with total supply expanding by nearly 120% quarter-over-quarter.
"At Ondo, we believe yield belongs to investors. We expect demand for yieldcoins to continue accelerating as onchain capital holders become more sophisticated."
On the Solana blockchain, USDY surpassed $100 million in TVL on October 16, achieving over 100% growth in 30 days. This establishes USDY as the fourth-largest USD-denominated store of value on Solana, surpassed only by non-yield-bearing stablecoins.
The U.S. Treasury Department has identified Ondo Finance as a "notable project" alongside BlackRock and Franklin Templeton in its latest market report, citing six key benefits of tokenization: improved transaction clearing and settlement, enhanced collateral management and capital efficiency, increased regulatory transparency, product innovation through composability, broader market inclusion via fractionalization, and 24/7 blockchain-based liquidity.
On October 30, Wellington Management, the largest independent manager with over $1 trillion in assets, announced a partnership with Ondo Finance to provide intraday liquidity technology for its Delta Wellington Ultra Short Treasury On-Chain Fund.
The fund operates through Libeara, a tokenization platform backed by Standard Chartered's SC Ventures, as part of a bigger initiative to bring traditional assets onchain. Its structure mirrors that of the SGD Delta Fund, which received an AA rating from Moody's. This rating marks the first such designation for a tokenized fund, establishing a precedent for tokenized traditional assets' security framework.
"We're thrilled to partner with Wellington on this pivotal step forward for onchain finance. By enabling 24/7 liquidity, Ondo Finance is ensuring that tokenized assets can be most effectively used as collateral and for cross-border settlement, including in the digital assets ecosystem." Nathan Allman, CEO of Ondo Finance
Ondo Finance reports active negotiations with additional asset managers to expand its real-time redemption capabilities, indicating further partnerships in the tokenized asset management sector are coming.