Ondo US Dollar Yield /USDY

What is Ondo US Dollar Yield (USDY)?

Ondo US Dollar Yield (USDY) is a new tokenized financial instrument secured by short-term U.S. Treasuries and bank demand deposits. It has been constructed to allow non-U.S. investors to safely invest in U.S. dollar-denominated yields using a stable blockchain-based instrument while complying with existing regulations. Unlike other forms of stablecoins, USDY is unique in that it provides an interest-bearing instrument that combines features found in both traditional financial instruments and traditional digital assets. USDY is issued by Ondo Finance, a financial services firm founded in 2021 by Nathan Allman, a former associate at Goldman Sachs, that specializes in tokenized real-world assets (RWAs) and creates traditional financial products with the efficiency blockchain provides by making them more accessible and efficient.

Key Features of USDY

Asset-Backed Stability - USDY is backed one-for-one by short-term U.S. Treasuries and bank demand deposits, providing reliable backing for the token.

Yield-Generating Mechanism - Investors will track a variable annual percentage yield (APY), which is currently 5%, providing structured returns on USDY holdings.

Regulatory Compliance - Only non-U.S. investors can access USDY as a product, following the required KYC (Know Your Customer) and KYB (Know Your Business) verification.

Minting and Redemption - Investors can mint and redeem USDY daily but are restricted from transferring USDY until all compliance issues have been met (usually 40-50-day period).

Institutional & Retail Use - The USDY token will be accessible by both institutional and individual investors looking to access U.S. Treasury-backed yield.

What is the USDY Token?

The USDY Token is a digitalized form of an asset backed by U.S. Treasury securities issued on a blockchain. It provides investors with stable interest-bearing exposure to U.S. dollar-backed returns. As a structured alternative to other stablecoins, USDY offers a fixed-income solution as opposed to cryptocurrencies that will fluctuate with the markets and will seek stability and predictable yield generation when compared to fixed-income and other traditional financial instruments. 

The USDY token serves as a bridge from regulated financial markets to decentralized systems while providing secure, transparent, and compliant access to investment opportunities backed by the U.S. Treasury.