Ondo Finance is the leading protocol for permissionless tokenized US Treasury products. Its flagship products — USDY and OUSG — bring T-bill yield on-chain in a format that DeFi protocols can use as collateral, payment rails, or yield positions.
USDY: Tokenized T-Bills for Everyone
USDY (Ondo US Dollar Yield) is a yield-bearing token backed by short-term US Treasuries and bank demand deposits. Unlike traditional money market funds, USDY is designed for broad access:
- Non-US users: Accessible globally except US persons and sanctioned jurisdictions
- No minimum: Small amounts accessible, unlike institutional T-bill products
- Permissionless DeFi use: USDY can be used as collateral on Morpho, traded on DEXes, and integrated into DeFi protocols without KYC at the protocol level
USDY accrues yield daily. Each token represents $1 plus accumulated yield — similar to how stETH appreciates vs ETH. Current yield: approximately 4.5–5% APY (tracks Fed Funds Rate closely).
OUSG: Institutional T-Bill Token
OUSG (Ondo Short-Term US Government Bond Fund) is Ondo's institutional product, backed by BlackRock's SHV ETF (short-term Treasury ETF). Access requires KYC and is restricted to qualified purchasers ($5M+ net worth).
OUSG is used primarily by:
- DeFi protocols as high-quality collateral backing stablecoins
- DAOs investing treasury funds in yield-bearing safe assets
- Institutional DeFi desks seeking T-bill yield on-chain
rOUSG (rebasing OUSG) is the DeFi-integrated version — balance increases daily like stETH.
Flux Finance: RWA as DeFi Collateral
Flux Finance is Ondo's lending protocol that enables borrowing against OUSG and USDY:
- Deposit OUSG as collateral
- Borrow USDC at rates below T-bill yield (net positive carry)
- Effectively levered T-bill exposure without selling the underlying
Lenders on Flux deposit USDC and earn interest from borrowers. Since OUSG borrowers are creditworthy institutions with T-bill collateral, Flux lender risk is lower than typical DeFi lending markets.
ONDO Token
ONDO is Ondo Finance's governance token. Holders vote on:
- New product approvals (additional RWA types)
- Collateral parameters for USDY
- Protocol fee structures
- Flux Finance risk parameters
ONDO was distributed via airdrop to early Ondo protocol users and ecosystem participants.
The Ondo Global Markets Vision
Ondo is building toward a broader platform: Ondo Global Markets — a system where tokenized securities from any country's market can be accessed globally. US equities, Japanese government bonds, European corporate credit — all accessible via the same DeFi-compatible interface.
This positions Ondo as infrastructure for the tokenized finance future rather than just a single product.
Why USDY Matters for DeFi Stablecoins
USDY competes directly with USDC and USDT for DeFi stablecoin use — but USDY pays yield while the others don't. As DeFi protocols integrate USDY as a base asset, it creates pressure on stablecoin issuers to share yield with holders.
This dynamic is already playing out: DAI's Savings Rate, Frax's sfrxUSD, and similar products are responding to the T-bill yield competition from RWA tokens.