RWA leader Ondo Finance announced in a blog post yesterday that it will launch a tokenized platform called Ondo Global Market (Ondo GM) targeting global investors (currently not available in the US). The platform aims to utilize blockchain technology to facilitate the purchase of US financial products for global investors. The article also introduces the financial advantages, features, and solutions to traditional financial pain points offered by Ondo GM.
RWA project Ondo Finance, a leader in the real world assets sector, announced in a blog post yesterday that it will launch a tokenized platform called Ondo Global Market (Ondo GM) targeting global investors (currently not available in the US). According to the article, Ondo GM aims to digitize the US financial product chain through blockchain technology, offering assets such as stocks, bonds, and ETFs, with each token issued on Ondo GM having 1:1 asset reserve support.
Financial Advantages of Ondo GM
We know that investors in the traditional financial field may encounter many complex and time-consuming processes and restrictions when purchasing financial products. In response, the article also lists the financial advantages that Ondo GM can bring to investors, brokers, and institutions:
– Overseas Investors: Overseas individual investors can have low-friction access to US securities with the convenience comparable to stablecoin purchases, opening up global participation in markets that are difficult to access. These investors can also utilize on-chain financial services, including lending, trading, and derivatives trading, often enjoying interest rates typically limited to institutional investors.
– Overseas Brokers: Traditional brokers outside the US can utilize Ondo Global Markets as an alternative way to provide their clients with US securities investments, significantly reducing operational complexity and costs compared to traditional broker-dealer models. By integrating Ondo GM, these brokers can also offer services supported by third-party protocols.
– Institutions and Issuers: Asset management companies and other issuers gain a new distribution channel that can reach a wider range of global on-chain investors and enable the on-chain issuance of new assets. Investment advisors, including robo-advisors, can also utilize on-chain financial infrastructure to transparently manage funds supported by tokenized securities.
– On-chain Users: Existing platforms in the crypto ecosystem, including wallets, protocols, and exchanges, can provide users with the opportunity to invest in high-quality traditional securities that were previously unavailable 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 lending and derivatives trading.
Core Features of Ondo GM
In addition, the article mentions several core features of Ondo GM:
– 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: Token minting, redemption, and transfers can be done globally (outside the US) at any time.
– Instant minting and redemption: Immediate tokenization and redemption of securitized assets.
– Full liquidity: Ondo GM assets have the same liquidity design as their underlying securities, allowing for instant, low-slippage buy and sell transactions.
– Built-in leverage access: The ability to use tokenized holdings as collateral to access competitive-rate lending services, typically only available to traditional institutional investors.
– On-chain financial services: The use of various on-chain financial protocols covering trading, lending, and derivatives, applying the transparency and composability of DeFi to traditional assets.
– Additional revenue opportunities: The ability to use tokens as collateral to support on-chain financial infrastructure, including blockchain, oracle, and bridging protocols, to generate new sources of revenue.
– Freely transferable tokens: The freedom to 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: Maximum reduction of bankruptcy risk through robust legal structures, while ensuring token holders have 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 only lent when users explicitly opt in, avoiding additional risk.
– Comprehensive API support: 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.
Addressing Traditional Financial Pain Points
On the other hand, the article also outlines how Ondo GM addresses various flaws in current traditional financial services:
Problem 1: Accessibility and Cost
Many investors around the world 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.
Problem 2: Platform Lock-in
Investors with US financial accounts are often restricted to a single platform that determines fees, management fees, available financial products, and services, with the process of transferring brokers being cumbersome and time-consuming. According to the article, Ondo GM tokens can be freely transferred outside the US, allowing investors to move their holdings to any wallet or platform (including DeFi protocols) at any time, and investors can fully leverage the composability of DeFi.
Problem 3: Platform Fragmentation
User assets on securities brokerage platforms are typically recorded in independent books and systems, preventing flexible operations across different brokers. The article states that ownership of Ondo GM tokens is recorded on the blockchain, and investors can authorize different platforms to perform buying, selling, lending, and collateral operations on their assets.
Problem 4: Restrictive and Expensive Leveraged Trading
Leverage options in traditional financial services products (i.e., borrowing against investment portfolios) are often expensive and limited, making it difficult for investors holding both traditional financial assets and crypto assets to effectively leverage both for borrowing and collateral purposes. 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 engage in cross-asset operations with tokenized securities and crypto assets.
Problem 5: Hidden Risks
Many traditional financial platforms lend out customers’ securities without explicit consent, exposing investors to additional risks, and the income generated from these lent securities often goes to the platform. In response, 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.
