Ondo Finance has launched Ondo Global Markets, a platform that tokenizes over 100 U.S. stocks and ETFs on the Ethereum blockchain, targeting non-U.S. investors in regions like Asia-Pacific, Africa, and Latin America.
These tokenized assets, backed by securities held at U.S.-registered broker-dealers, mirror the economic performance of stocks like Apple and Nvidia, and ETFs from providers like BlackRock, offering 24/7 trading and fractional ownership. The platform integrates with DeFi protocols and partners like Chainlink, BitGo, and OKX, with plans to expand to over 1,000 assets by year-end and support additional blockchains like Solana and BNB Chain via LayerZero.
Tokens are not available in the U.S. due to regulatory restrictions, and they don’t grant direct ownership but provide exposure to price changes and dividends. The launch aligns with a growing trend in tokenized real-world assets, though regulatory challenges and concerns about shareholder rights persist.
Tokenized assets allow investors in regions with limited access to U.S. brokerages to gain exposure to major U.S. stocks (e.g., Apple, Nvidia) and ETFs (e.g., BlackRock’s). This democratizes access to high-value assets, bypassing traditional barriers like high account minimums or complex cross-border regulations.
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Investors can trade these assets 24/7, unlike traditional stock markets with fixed trading hours, enabling greater flexibility. Tokenization enables fractional ownership, allowing investors to purchase small portions of high-priced stocks or ETFs. This lowers the capital required to invest, making markets more inclusive for retail investors in emerging economies.
Integration with DeFi Ecosystems
By integrating with DeFi protocols (e.g., via Chainlink for price feeds, BitGo for custody), tokenized assets can be used as collateral, traded in decentralized exchanges (DEXs), or incorporated into yield farming and lending protocols. This creates new financial use cases, such as leveraging tokenized stocks for loans or staking.
Compliance with local regulations in target markets (e.g., Asia-Pacific, Africa) will be critical to avoid legal risks, as tokenized securities operate in a gray area in many jurisdictions. Ondo’s move aligns with a broader trend of real-world asset (RWA) tokenization, with competitors like Securitize and Franklin Templeton also tokenizing assets.
Plans to expand to over 1,000 assets and support additional blockchains (e.g., Solana, BNB Chain) signal ambition to capture a significant share of the tokenized asset market, estimated to grow to $16 trillion by 2030 (per BCG and ADDX).
Investors bear risks like smart contract vulnerabilities, counterparty risks with custodians, and market volatility. The lack of direct ownership may also raise concerns about shareholder rights, such as voting or corporate governance.
Unlike traditional stock markets with set trading hours, tokenized assets on blockchain platforms can be traded around the clock. This continuous trading increases market activity and liquidity, as investors can buy or sell at any time, reducing delays and improving price discovery.
By targeting non-U.S. investors in regions with underdeveloped financial infrastructure, tokenized assets tap into new pools of capital. This expanded investor base increases demand and trading volume, directly boosting liquidity. Fractional ownership allows smaller investors to participate, increasing the number of market participants.
For example, instead of buying a full share of a high-priced stock like Nvidia, investors can purchase a fraction of a token, leading to more frequent and smaller transactions that enhance liquidity. Tokenized assets can be integrated into DeFi platforms, enabling their use in automated market makers (AMMs), DEXs, or lending protocols.
For instance, investors could use tokenized ETFs as collateral for loans or trade them on Uniswap-like platforms, creating secondary markets that further increase liquidity. This interoperability allows assets to flow seamlessly between different protocols, reducing friction and enabling faster transactions.
Ondo’s planned support for multiple blockchains (e.g., Ethereum, Solana, BNB Chain via LayerZero) enables tokenized assets to reach users on different networks. This cross-chain accessibility broadens the market, attracting more traders and improving liquidity across ecosystems.
Blockchain-based trading eliminates some traditional intermediaries (e.g., brokers, clearinghouses), reducing transaction costs and settlement times. Lower costs encourage more frequent trading, while instant settlement (or near-instant on blockchains) ensures faster capital turnover, both of which enhance liquidity.
Tokenized assets can leverage smart contracts for automated trading strategies, such as limit orders or arbitrage across platforms. This programmability increases trading activity and market efficiency, contributing to higher liquidity. Partnerships with custodians like BitGo and exchanges like OKX attract institutional investors, while fractionalization appeals to retail investors.
Ondo Finance’s tokenization of U.S. stocks and ETFs has the potential to significantly boost liquidity by enabling 24/7 trading, fractional ownership, and DeFi integration, while tapping into global markets with limited access to U.S. assets. By lowering barriers to entry and leveraging blockchain’s efficiency, Ondo can attract a diverse investor base, increasing trading volume and market depth.