RWA leader Ondo Finance announced in a blog post yesterday that it will launch the tokenized platform Ondo Global Market (Ondo GM) for global investors (not available in the US). The platform aims to use blockchain technology to facilitate the purchase of US financial products for investors worldwide. The article also introduces the financial advantages, features, and solutions to traditional financial pain points of Ondo GM.
RWA (Real World Asset) leader Ondo Finance announced in a blog post yesterday that it will launch the tokenized platform Ondo Global Market (Ondo GM) for global investors (not available in the US). According to the article, Ondo GM aims to tokenize the US financial product chain through blockchain technology. The platform will offer assets such as US stocks, bonds, and ETFs, and each token issued on Ondo GM will be backed by a 1:1 reserve of assets.
Financial Advantages of Ondo GM
We know that investors may encounter many complex and time-consuming processes and restrictions when purchasing financial products in the traditional financial field. The article also lists many financial advantages that Ondo GM can bring to investors, brokers, and institutions:
– Overseas Investors: Overseas individual investors can have extremely low friction costs to invest in US securities, making it as convenient as purchasing stablecoins. This opens up global participation in certain markets that are difficult to access. These investors can also use on-chain financial services, including lending, trading, and derivatives trading, and in many cases, enjoy interest rates that are usually limited to institutional investors.
– Overseas Brokers: Traditional brokers outside the US can use Ondo Global Markets as an alternative way to provide their clients with US securities investments. Compared to traditional brokerage models, it significantly reduces operational complexity and costs. By integrating Ondo GM, these brokers can also provide services supported by third-party protocols to their users.
– Institutions and Issuers: Asset management companies and other issuers have gained a new distribution channel that can reach a wider range of global on-chain investors and can bring new assets on-chain. Investment advisors, including robo-advisors, can also use on-chain financial infrastructure to transparently manage funds supported by tokenized securities.
– On-Chain Users: Existing crypto ecosystem platforms, including wallets, protocols, and exchanges, can offer users the opportunity to invest in high-quality traditional securities, which in many cases were previously not available on-chain (subject to applicable regulatory requirements). Users of these platforms may particularly value the ability to combine crypto assets with securities, such as achieving cross-collateralization in loans and derivatives trading.
Core Features of Ondo GM
In addition, the article mentions several core features of Ondo GM, including:
– Broad Exposure to Thousands of RWAs: The ability to invest in over a thousand securities listed on the New York Stock Exchange (NYSE) and NASDAQ.
– Global 24/7 Availability: The ability to mint, redeem, and transfer tokens globally (outside the US) at any time.
– Instant Minting and Redemption: The ability to instantly mint and redeem tokenized securities.
– Full Liquidity: The liquidity design of Ondo GM assets matches that of the underlying securities, allowing for instant, low-slippage trading.
– Built-in Leveraged Access: The ability to use tokenized holdings as collateral to access competitive-rate lending services, which are typically limited to traditional institutional investors.
– On-Chain Financial Services: The ability to use various on-chain financial protocols covering trading, lending, and derivatives, applying the transparency and composability of DeFi to traditional assets.
– Additional Yield Opportunities: The ability to use tokens as collateral to support on-chain financial infrastructure, including blockchain, oracles, and bridging protocols, to generate new sources of revenue.
– Freely Transferable Tokens: The ability to freely transfer tokens on secondary markets outside the US and use them in various on-chain protocols and wallets, without being restricted to specific platforms.
– Institutional-Grade Investor Protection: Maximizing bankruptcy risk reduction through robust legal structures while ensuring token holders have the security rights to the underlying assets.
– Securities Lending Income: The option to lend underlying securities supporting tokens to the institutional securities lending market for additional income, with securities being lent out only when users explicitly opt in, avoiding additional risk.
– Comprehensive API Support: The integration of powerful APIs that allow brokers, asset issuers, and other platforms to build applications on top of Ondo GM, reducing costs, modernizing backend infrastructure, and improving user experience.
Solving Traditional Financial Pain Points
On the other hand, addressing various flaws in current traditional financial services, the article also outlines how Ondo GM solves them:
Issue 1: Accessibility and Cost
Many investors worldwide face restrictions and high fees when accessing US financial products and services. The article states that through Ondo GM, eligible investors outside the US can invest in thousands of US securities (such as AAPL, TSLA, SPY, QQQ, etc.) with stablecoins at the lowest cost, eliminating traditional costs and geographical restrictions.
Issue 2: Platform Binding Restrictions
US financial account investors are often limited to a single platform, where the platform decides fees, management fees, available financial products, and services. Transferring brokers in this process is cumbersome and time-consuming.
According to the article, Ondo GM tokens can be freely transferred outside the US, allowing investors to transfer their holdings to any wallet or platform (including DeFi protocols) at any time. Investors can also fully leverage the composability attributes of DeFi.
Issue 3: Platform Fragmentation
User assets from securities brokers are typically recorded in independent books and systems, preventing flexible operations across brokers. The article states that ownership of Ondo GM tokens is recorded on the blockchain, and with investor authorization, they can allow different platforms to trade, lend, and collateralize their assets.
Issue 4: Restrictive and Expensive Leveraged Trading
Leverage options in traditional financial service products (i.e., borrowing against portfolios) are often expensive and limited in choice, preventing effective leveraging of both traditional and crypto assets by investors. The article states that Ondo GM directly integrates institutional-grade lending options on its platform. Investors can borrow against their tokenized holdings as collateral through third-party protocols or directly on Ondo GM, and they can also flexibly perform cross-asset operations with tokenized securities and crypto assets.
Issue 5: Hidden Risks
Many traditional financial platforms lend out customers’ securities without explicitly informing them, exposing investors to additional risks, and the income generated from these lent securities usually belongs to the platform. The article states that Ondo GM will never lend out securities without explicit authorization from investors and will fully deliver the securities lending income to users.
