Ondo Finance

Ondo Finance designs institutional-grade platforms, assets, and infrastructure to bring traditional financial markets onchain. Its product suite includes yieldcoins (USDY for non-US retail and institutional investors, OUSG for qualified purchasers) backed by short-term US Treasuries with daily distributed yield, a Global Markets platform offering 200+ tokenized stocks and ETFs with instant mint/redeem and total-return tracking (price appreciation plus reinvested dividends), and Ondo Perps for perpetual futures on equities and commodities. Ondo also develops Ondo Chain, a purpose-built Layer 1 for omnichain real-world assets, and supports DeFi utility via Flux Finance (onchain treasury repo market) and integrations across multiple blockchains.

Ondo Finance generates yield across several separate product lines. Here is how each one works.

1. Yieldcoins (USDY and OUSG)

USDY (US Dollar Yield) — A transferable token available to investors outside the US. The token passes along the yield earned from a mix of short-term US government bonds (Treasuries). Ondo sets the APY (annual percentage yield) each month, following the rules in USDY's governing documents. The token is designed to stay at least 3% over-collateralized (meaning assets backing it exceed the token value by at least 3%), checked quarterly by an outside fund administrator.

OUSG (Ondo Short-Term US Treasuries Fund) — A token for Qualified Purchasers and Accredited Investors. It invests mainly in a short-term Treasury ETF called SHV, managed by BlackRock. The token's price goes up over time, reflecting the yield on the underlying bonds minus fund costs. The APY is figured by annualizing the price change over the prior 30 days.

Both yieldcoins share these features:

• Instant minting (creating tokens) and redemption (cashing them out), any time, every day of the year
• OUSG minimum: $5,000; USDY minimum: $500
• Daily reserve checks by an outside party
• Legal structures that keep the assets separate from Ondo (bankruptcy-remote)

2. Ondo Global Markets

This platform issues tokenized versions of stocks, ETFs, and ADRs. Each token tracks the total return of a real US-listed security — meaning the token's value moves with the stock price and also includes reinvested dividends (minus any withholding taxes that apply). There is no extra yield beyond what the underlying security itself earns; dividends are automatically reinvested by design.

Each token is fully backed 1:1 by the real security held at US-registered broker-dealers. An independent Verification Agent checks this backing daily. A Security Agent holds a first-priority legal claim on the assets. Minting and redemption (available Monday through Friday, 24 hours a day) happen at the cash value of the underlying asset.

3. Ondo Perps

A platform for perpetual futures — a type of leveraged trading — on major US stocks, ETFs, and commodities. It runs 24/7. Whether you earn yield or pay a cost depends on funding rates (periodic payments between long and short traders) and the direction of your position.

4. Flux Finance (now owned by the Ondo Foundation / Ondo DAO)

This is the first onchain Treasury repo market — think of it as a lending marketplace where Treasury-backed tokens serve as collateral. OUSG tokenholders can pledge their OUSG as collateral to borrow stablecoins. When they do, they receive receipts called fOUSG that have built-in transfer restrictions to stay compliant with regulations.

Where Ondo itself earns revenue

• USDY and OUSG include management and administrative fees built into the fund structures (the exact fee percentages are in the offering documents).
• Tokenized securities (Global Markets) charge fees embedded in the spread between mint and redeem prices, plus custody arrangements, as disclosed in the prospectus filed with the Liechtenstein FMA (Financial Market Authority).

There is no single unified fee or emission stream across all products; each product's fee design is described in its own governing documents.