TLDR:
- USDY yieldcoin, launched by Ondo Finance, has made its debut on the Arbitrum Layer 2 network.
- For investors outside the US, the USDY yieldcoin presents an attractive option, offering a 5.35% APY backed by solid US Treasuries.
- Utilized across Arbitrum protocols like Camelot and Dolomite, USDY yieldcoin is now seamlessly integrated.
- This initiative constitutes 17% of the overall treasury investment by Arbitrum DAO.
- The increasing trend of integrating tokenized real-world assets (RWAs) into DeFi is reflected in this initiative.
Ondo Finance Ondo Finance's USDY yieldcoin has officially been introduced to the Arbitrum network. Being a major scaling network for Ethereum, Arbitrum witnesses a key expansion of real-world assets (RWAs) within the DeFi domain with this launch.
Non-US investors can now access USDY, a tokenized US Treasury product, within one of DeFi's most robust ecosystems.
Offering a 5.35% annual yield, USDY boasts over $350 million in assets locked across various blockchains, blending stablecoin stability with enticing yields and top-tier protections for investors worldwide.
As Arbitrum's network amasses $15.5 billion in TVL and $4.5 billion in stablecoins, the addition of USDY helps maintain Ethereum's scalability through Optimistic Rollup technology.
As part of the rollout, the Arbitrum DAO’s STEP Committee allocated 6 million ARB tokens, representing 17% of their treasury, to USDY by Ondo.
The $36 billion reserved for Arbitrum’s treasury sees USDY as its second-largest allocation after BlackRock's BUIDL fund, comprising 17% of its entirety.
USDY is now operational with premier Arbitrum DeFi protocols. Camelot, the largest decentralized exchange (DEX) on Arbitrum, facilitates USDY trading and liquidity provision for fee earnings, while Dolomite, a leading lending protocol, enables USDY borrowing and lending.
Katie Wheeler, Vice President of Partnerships at Ondo Finance, expressed excitement, stating:
“The launch of USDY on Arbitrum paves new avenues for DeFi applications to integrate our tokenized US Treasuries.”
From Offchain Labs, which constructed Arbitrum, Luke Xiao remarked:
“Incorporating this asset expands DeFi user benefits on Arbitrum, emphasizing increased demand for onchain real-world assets.”
International investors can now easily purchase USDY straight from Ondo or through the Arbitrum network. Upon exchanging stablecoins for USDY, investors start earning at a rate of 5.35% APY, thanks to backing by US Treasury Bills.
Supporting the assimilation, Pyth will provide oracle price feeds for USDY on Arbitrum, with primary market prices from direct Ondo purchases and secondary prices from all liquidity venues.
Designed as a tokenized note endorsed by US Treasuries, USDY aims for robust bankruptcy protection.
Noteworthy aspects include broad access for non-US investors, its nature as a yield-bearing asset, premium collateral quality, adherence to regulations, and a design minimizing bankruptcy risk.
The unveiling of USDY on Arbitrum is part of a sweeping trend where tokenized treasury products gain traction on blockchain networks.
Data from RWA.xyz and Cointelegraph Research indicates a 150% increase in market cap for these products year-to-date, projecting $3 billion by the close of 2024. Key players such as BlackRock’s USD Institutional Digital Liquidity Fund and Franklin Templeton’s OnChain US Government Money Fund (FOBXX) mark their presence, with market caps of $509 million and $428 million, respectively. Franklin Templeton has also recently made FOBXX available on Arbitrum.
The Editor-in-Chief of Blockonomi, also the founder of Kooc Media, a UK online media entity, champions Open-Source Software, Blockchain, and advocating for a free and fair internet.
