A blockchain innovation leader for the financial sector, Ondo Finance has launched a groundbreaking Layer 1 blockchain—Ondo Chain. The platform aims to bridge the gap between the traditional finance world and the decentralized finance world (DeFi). Ondo Chain’s primary purpose is to serve as an accessible, secure, and seamless platform for tokenizing real-world assets (RWAs)—like U.S. public securities—that can be made available on-chain to a global, 24/7 investing public. The new platform is inciting a good deal of buzz. That buzz factors in the likely involvement of such high-profile figures as Donald Trump Jr. and such potential milestone events as listings on major exchanges like Binance. Besides that, buzz seems to be favored by the presence of prominent partners/advisors like BlackRock, PayPal, and Morgan Stanley. 1/ Today, we’re thrilled to announce Ondo Chain, our new Layer 1 blockchain purpose-built for institutional-grade RWAs. Design advisors for the chain include new members of the Ondo Ecosystem: Franklin Templeton, Wellington Management, WisdomTree, Google Cloud, ABN Amro, Aon,… pic.twitter.com/a35GHB7OFW — Ondo Finance (@OndoFinance) February 6, 2025 A Solution to Longstanding Challenges in the RWA Sector Ensuring that the launch of Ondo Chain matters is simple, as it tackles head-on a few main problems that have not just slowed down the rise of tokenized real-world assets but also kept institutional finance separate from blockchain technology. These problems are: – DeFi’s Incompatibility with Traditional Financial Assets: Public securities are just one kind of asset that DeFi systems are not built to handle. They have characteristics that our current decentralized systems cannot replicate. For instance, when a corporation has an action that affects its stock (like declaring a dividend), it requires a reliable mechanism for large-scale data distribution. And right now, DeFi lacks that reliable mechanism, which renders it incompatible with public companies’ securities. – Cross-chain liquidity fragmentation: RWAs are generally issued across several chains, which creates liquidity problems and makes bridging a necessity. Nevertheless, a good number of existing bridges have security risks and give rise to more failure points. – Unpredictable and Fluctuating Transaction Expenses: The costs of executing transactions can be quite high. These expenses are paid in native tokens that are often quite volatile, making the transaction costs themselves rather unpredictable and cumbersome. This is a significant deterrent to the participation of sensible institutions. – Insufficient Security for Network and Protocols: The current security model often relies on staking volatile native tokens. This is fundamentally mismatched because RWAs are much less volatile. To our knowledge, this is the first time that this serious vulnerability has been identified. From our analysis, the DSR model is critically undermined by potentially sizable, undetected security leaks. – Regulatory Issues for Institutions: Compliance is a major problem for regulated institutions that want to deal on public blockchains. They also have serious concerns about gas fees and front-running. Until these issues are resolved, the potential for real-world assets to exist on the blockchain is limited. These problems have been specifically designed to allow the RWAs (real world assets) to be tokenized and transacted with greater security and efficiency than is currently possible. And that’s what the Ondo Chain does. Key Features and Innovations The Ondo Chain is equipped with several unprecedented attributes that allow it to effectively cater to institutional investors and the stringent demands of regulated financial markets. Among these attributes are the following: – Network Security from Real-World Assets: Ondo Chain allows validators to stake RWAs to secure the network, which enhances security while lowering operational costs, when compared to traditional crypto infrastructure. This is not just a clever way of structuring a blockchain. It derives from our fundamental belief that institutional investors don’t just want to own RWAs; they also want to harness the potential of crypto-native primitives like staking, which earn income, when they are building out the next generation of financial infrastructure. – Validator permissions: To guard against miner extractable value (MEV) and front-running, Ondo Chain operates a permissioned validation system, allowing only well-regulated and reputable institutions to take part. This setting significantly boosts investor protection and ensures RWAs’ transactions receive optimal execution. – Network Connectivity for Financial Institutions: A subset of validators will be operated by financial institutions, ensuring efficient connectivity between Ondo Chain and traditional finance networks. This will reduce transaction latency and increase access to off-chain assets and liquidity. In this environment, it will be easy for institutional participants to access Ondo markets and take part in the tokenized economy. – Data Feeds That Are Scalable and Secure: Validators of the Ondo Chain will act as enshrined oracles, publishing crucial off-chain information—like asset prices and interest rates—directly to the blockchain. This guarantees not just accurate data but also tamper-proof data, meaning the risk of manipulation is as low as you can get. And low risk of manipulation means improved scalability. – Omnichain Messaging and Bridging: One of the most important innovations of the Ondo chain is its native omnichain messaging and bridging capabilities. From a user experience standpoint, the Ondo Bridge allows tokenized RWAs to be issued and transferred across multiple chains, while maintaining security and reducing risk. For developers, the omnichain messaging capability of the Ondo chain opens up a new realm of possibilities for building the next generation of blockchain applications. – Proof of reserves and collateral is enshrined: Each tokenized real-world asset on the Ondo Chain is fully backed by the underlying asset, with validators—think of them as a distributed network of truth-tellers—verifying that backing, to the extent possible, in order to mitigate counterparty risk. That gives us more trust and faith in the system. Why? Because trust and faith in the system are what central banks, asset managers, and investment funds require. – DeFi Functionality for RWAs, Right Out of the Box: Ondo Chain enables DeFi for RWAs. So, if you’re a developer, you can build real, functional DeFi apps for RWA tokens on the Ondo Chain platform. These apps can permit RWA tokens to participate in DeFi without introducing “new tokens, new mechanics, or new regulations” to the DeFi space. – Grade-Governance Institutional: Ondo Chain’s decentralized governance permits key financial institutions to take part in crucial decision-making, run by permissioned validators. This way, Ondo Chain remains an industry utility—much like the DTCC (Depository Trust & Clearing Corporation)—while still (this is clutch!) being adaptable to our ever-evolving regulatory landscape and any other phrase you might want to throw in there. The top trending keywords trending across crypto social media Friday include: The Berachain project is trending due to promotional campaigns involving the distribution of $BERA tokens. Users are connecting their wallets to benefit from this distribution, and Berachain is… pic.twitter.com/zhpw8tfaC3 — Santiment (@santimentfeed) February 7, 2025 A Bright Future for Tokenized Real-World Assets A significant step forward has taken place in the area of traditional financial asset tokenization: the launch of Ondo Chain. Aiming to resolve fundamental issues of security, liquidity, and scalability, the new platform intends to change the future course of interaction between institutional investors and both blockchain technology and real-world assets. With a robust lineup of advisors and partners, including Franklin Templeton, Wellington Management, and Google Cloud, Ondo Chain is carving out a well-defined space in the nascent sector of tokenized assets. As the world becomes more intrigued by tokenized assets, Ondo Chain’s structure and institutional-grade, near-impenetrable infrastructure could open the door to widespread adoption. With a blockchain that combines the best aspects of both public and permissioned architectures, Ondo is setting a new standard for the coexistence of traditional and decentralized finance. Its future is less a vision of immutably storing vast pools of data and more one of creating a pioneering framework for secure tokenized trade. Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services. Follow us on Twitter @nulltxnews to stay updated with the latest Crypto, NFT, AI, Cybersecurity, Distributed Computing, and Metaverse news ! Image Source: bizoon/ 123RF // Image Effects by Colorcinch
