Ondo Finance, the issuer of tokenized secure notes and on-chain treasuries, collaborated with Axelar to introduce Ondo bridge, a cross-chain solution inspired by Circle’s cross-chain transfer protocol. The bridge will support the issuance of native tokens, including Ondo’s USDY, across blockchain networks supported by Axelar.
USDY is a tokenized note from Ondo secured by short-term U.S. treasuries and bank demand deposits. It aims to simplify the movement of Ondo tokens representing real-world assets, such as the recently introduced yield-bearing stablecoin USDY, across different blockchain networks.
“Demand for better stablecoins is growing – and it isn’t limited to a single web3 ecosystem,” said Nathan Allman, founder and CEO of Ondo. “The Ondo Bridge enables us to meet that demand wherever it exists, with a superior and safer yield-generating stablecoin.”
Ondo’s first core products are tokenized cash equivalents that deliver yield backed by assets like U.S. treasuries, money market funds and similar instruments. The objective is to offer users alternative to stablecoins where holders rather than issuers earn the majority of the underlying asset yield.
Ondo Finance tops the tokenized securities niche with approximately 50% market share, according to a Steakhouse Financial Dune Analytics dashboard, and has legally structured USDY as a tokenized bearer instrument. Ondo has over $200 million in total value locked, according to DeFiLlama.
Axelar’s cross-chain utilization
In this context, Axelar’s programmable cross-chain network will allow Ondo to manage USDY supply across chains, burning tokenized representations of its real-world assets on one chain to mint them on another. The initial deployment 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 wrapped assets, according to the team. Additionally, the integration will enable unified secondary market liquidity, allowing traders to capitalize on token price arbitrage across various decentralized exchanges, maintaining price stability.
