Ondo Finance is expanding its tokenized real-world asset (RWA) platform beyond the Ethereum mainnet to the Polygon network, the company announced Thursday. As part of a strategic alliance, Ondo has issued its OUSG token, a tokenized version of BlackRock’s short-term U.S. government bond exchange-traded fund, natively on Polygon. The firm also plans to bring its upcoming yield-generating stablecoin alternative, OMMF, and the Ondo-developed decentralized lending marketplace Flux Finance to Polygon.
Tokenized Treasuries has grown to a $600 million market, with Ondo Finance’s OUSG token claiming a significant share of $134 million since its inception in January, said Justin Schmidt, president and chief operating officer of Ondo. Ondo Finance building on Polygon is a crucial step toward bridging the gap between DeFi and institutional-grade finance, added Colin Butler, global head of institutional capital at Polygon Labs.
Polygon is a layer 2 scaling network of Ethereum that allows users to transact more quickly and cheaply than on the mainnet, while still relying on Ethereum’s security. With wealth management firm Bernstein forecasting that tokenization of RWAs could grow to $5 trillion in market value in the next five years, Ondo’s move follows asset management giant Franklin Templeton, which made its tokenized Franklin OnChain U.S. Government Money Fund (FOBXX) available on Polygon after releasing it on Stellar in 2021.