Ondo Finance, the issuer of tokenized secure notes and on-chain treasuries, partnered with Axelar to introduce Ondo bridge, a cross-chain solution inspired by Circle’s cross-chain transfer protocol. The bridge supports the issuance of native tokens, including Ondo’s USDY, via blockchain networks powered by Axelar.
USDY is a tokenized banknote of Ondo secured by short-term US Treasury bonds and demand bank deposits. It aims to facilitate the movement of Ondo tokens representing real-world assets, such as the recently launched interest-bearing stablecoin USDY, across various blockchain networks.
“The demand for better stablecoins is growing – and it’s not limited to a single web3 ecosystem,” said Nathan Allman, founder and CEO of Ondo. “The Ondo Bridge allows us to meet that demand wherever it exists with a superior and more secure stablecoin that generates returns.”
Ondo’s first core products are tokenized cash equivalents that provide returns, backed by assets such as US Treasury bonds, money market funds and similar instruments. The goal is to provide users with an alternative to stablecoins where holders, rather than issuers, earn the majority of the returns on the underlying assets.
Ondo Finance tops the tokenized securities niche with approximately 50% market share, according to a dashboard from Steakhouse Financial Dune Analytics, and has legally structured USDY as a tokenized bearer instrument. According to DeFiLlama, Ondo has a total locked-up value of over $200 million.
Axelar’s cross-chain use
In this context, Axelar’s programmable cross-chain network will enable Ondo to manage USDY offerings across chains, burning tokenized representations of its real-world assets on one chain to store them on another. The initial implementation will rely on Squid, a cross-chain liquidity router built on Axelar, to transfer USDY between some chain pairs, including Mantle.
This integration ensures that tokens transferred between networks remain native, using a burn-and-mint mechanism to avoid bridging risks associated with packaged assets, the team said. Furthermore, the integration will enable uniform liquidity in the secondary market, allowing traders to benefit from token price arbitrage on various decentralized exchanges, thereby maintaining price stability.
