Bittime – Blockchain-based financial company, Ondo Finance, has just made a strategic move in terms of its token-backed assets. $95 million in assets was allocated into BUIDL, BlackRock's token, to facilitate instant transactions on the US Treasury-backed OUSG token.
This move marks a new milestone as the first use of asset tokenization by BlackRock, a global asset management giant, by another crypto protocol.
OUSG Ondo Was Once Supported by BlackRock Products
Previously, Ondo's OUSG token was backed by the iShares Short Treasury Bond ETF, a BlackRock product that could only be traded during traditional market operating hours. This is of course contrary to the nature of crypto assets which operate 24/7.
Ondo Finance CEO, Nathan Allman, in an interview with CoinDesk, explained that the allocation of funds to BUIDL will make OUSG "much more useful" because it allows instant subscription and redemption processes, at any time.
Previously, the process took T+2 days, which was less efficient.
"Many investors were previously hesitant to use OUSG because of the long redemption time," said Allman.
"Given the volatility of the crypto market which operates 24/7/365 and the capital requirements that sometimes arise suddenly, the transaction speed factor becomes very important. With the implementation of BUIDL, OUSG will become a much more useful asset as a store of value and collateral asset in the crypto ecosystem. "
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Ondo Transfers $95 Million in OUSG Assets to BUIDL
Ondo has transferred $15 million of OUSG backing assets to BUIDL and moved another $80 million through the end of the day on Wednesday, March 27, 2024. Blockchain data confirms that Ondo was the party to the minting of $79.3 million of BUIDL tokens.
Ondo's move is the first example of leveraging the tokenization of BlackRock assets by a crypto protocol. The BUIDL token, which is based on the Ethereum blockchain, is backed by US Treasury bills and repo agreements.
While BUIDL is only available to select institutional clients with a minimum investment of $5 million, other platforms like Ondo can utilize it for their products targeting retail investors.
Benefits and Impact of the Ondo Finance Strategy
Ondo Finance's decision to switch to BlackRock's BUIDL offers several advantages:
1. Instant Transactions
OUSG subscription and redemption transactions can now be done instantly, at any time. This certainly increases the attractiveness of OUSG for investors who need flexibility and speed in transactions.
2. Time Efficiency
By eliminating the T+2 process, Ondo can save time and resources previously required to process transactions.
3. Higher Liquidity
High transaction speed has the potential to increase OUSG's liquidity in the market. Investors will be more confident in investing in OUSG because of the ease of buying and selling offered.
4. BlackRock's reputation
The involvement of BlackRock, a well-known financial giant, also increases credibility and trust in OUSG. This may attract more institutional investors to use OUSG.
Also read How to Buy Crypto:
Other Things to Pay Attention to from OUSG Ondo
However, several things need to be paid attention to:
1. Dependence on Third Parties
Ondo now relies on BlackRock for security and asset management supporting BUILD. BlackRock's reputation and performance will also influence the stability of OUSG.
2. High Minimum Investment
Retail investors interested in OUSG were immediately deterred by BUIDL's high investment minimum ($5 million).
3. Regulation
The real asset tokenization industry is still relatively new, so regulations are still not completely clear. This can create uncertainty for investors.
Conclusion
Ondo Finance's move to partner with BlackRock is an interesting innovation in the use of real asset tokenization. The main advantage of this strategy is the ease and speed of OUSG transactions.
However, dependence on third parties and high investment minimums are factors to consider.
Investors need to carefully examine the various risks and benefits before deciding to invest in OUSG. Going forward, the use of real asset tokenization by large financial institutions such as BlackRock has the potential to drive the growth and wider adoption of blockchain technology.
How to Buy Ondo (ONDO) on Bittime
You can buy and sell Ondo (ONDO) easily and safely via Bittime. Bittime is one of the best crypto applications in Indonesia which is officially registered with Bappebti.
Ondo (ONDO) is available on Bittime with the ONDO/IDR market pair. To be able to buy ONDO IDR at Bittime, make sure you have registered and completed identity verification. Apart from that, also make sure that you have sufficient balance by depositing some funds into your wallet. For your information, the minimum purchase of assets on Bittime is IDR 10,000. After that, you can purchase crypto assets in the application.
Learn the complete guide on how to buy Ondo (ONDO) on Bittime.
Monitor the price chart movements of Ondo (ONDO), Bitcoin (BTC), Ethereum (ETH), Solana (SOL), and other cryptos to find out today's crypto market trends in real-time on Bittime.
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DISCLAIMER: This article is informational and is not an offer or solicitation to sell or buy any crypto assets. Trading crypto assets is a high-risk activity. Crypto asset prices are volatile, where prices can change significantly from time to time and Bittime is not responsible for changes in fluctuations in crypto asset exchange rates.
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