Decentralized, autonomous, organization-led web3 ecosystem Mantle partnered with tokenized financial products platform Ondo Finance to launch USDY, a return-generating token backed by real assets.
The yield-bearing token is being introduced to the Mantle Network following the launch of the Ethereum Layer 1 to Mantle Layer 2 bridge for USDY, a statement said. USDY is an upgradeable Ethereum ERC-20 token – available from Mantle decentralized exchanges such as Agni Finance and FusionX Finance.
Ondo Finance is the leader in tokenized securities with approximately 50% market share, according to a Steakhouse Financial Dune Analytics dashboard, and has legally structured USDY as a tokenized bearer instrument. Users can also directly invest in USDY on Mantle through Ondo Finance’s coin and bridge mechanism.
USDY offers an alternative to stablecoins such as Tether’s USDT and Circle’s USDC. It is a tokenized banknote backed by short-term U.S. Treasury bonds and demand bank deposits. According to the team, holders receive a return generated through the underlying assets in the form of accumulating token value.
Rebasing counterpart mUSD – a packaged version of USDY designed to maintain its peg at $1 with interest distributed via new tokens – is also expected to be released by Ondo Finance in the coming weeks, the team added.
“RWA is expected to play a key role in helping bring sustainable yield to Mantle’s broader DeFi ecosystem, and USDY and mUSD are crucial pieces of the puzzle,” said Mantle Chief Alchemist Jordi Alexander. “We are excited to work with Ondo Finance to build a highly liquid and easily accessible ecosystem for USDY and mUSD, which can be used and traded just like any stablecoin, but with the added benefit of being able to operate directly from the crypto wallet can benefit from the real yields from US government bonds. .”
“We are excited to partner with Mantle to bring USDY to market with deep secondary market liquidity,” added Ondo founder and CEO Nathan Allman.
Seed liquidity from the massive Mantle Treasury
Mantle Network unveiled its mainnet alpha at EthCC in July. Following a previous merger with backer BitDAO in May – which merged BitDAO’s governance framework and treasury into the network – Mantle is now backed by one of the largest sovereign bonds in crypto, valued at around $2 billion.
Mantle’s MIP-26 governance proposal – approved by the Mantle community in September – provided seed liquidity for a combined consideration of up to 60 million RWA yield-backed USD stablecoins, 30,000 ether ($56 million) and 20 million MNT ($8.2 million), with significant liquidity now set to be deployed on Mantle DEXs for USDY and mUSD.
In addition to accessibility, potential use cases for the tokens in the Mantle ecosystem include collateral for derivatives and lending protocols, and yield-bearing stablecoins in DEXs to enhance the economic incentives of liquidity provision, payments and settlement, the team said.
“RWA on blockchain has emerged as one of the use cases with the greatest potential to deliver significant benefits to users through its ability to deliver sustainable indigenous yields,” it added. “Mantle’s foray into RWA is being conducted with the focus on providing the best product experience to the community, following careful research and significant due diligence.”