Ondo Finance states that this new project seeks to combine the decentralization and convenience of blockchains with the world of permissioned traditional finance markets.
Ondo Finance Introduces Ondo Chain: An Initiative to Bring Wall Street Onchain
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Ondo Finance Announces Ondo Chain to Bring Real-World Assets to Blockchain
Ondo Finance, a protocol for real-world assets, has announced Ondo Chain, a Layer 1 (L1) solution that seeks to bridge the convenience of decentralized systems with the reality of permissioned security markets.
Ondo China, described as a proof-of- stake L1 platform, is the result of Ondo’s struggles to marry these two worlds. As part of the construction of Ondo Global Markets, a trading platform for securities, the team identified several pain points, including incompatibility with defi, liquidity fragmentation across chains, high and volatile fees that can disrupt trading activities, protocol security considerations, and even institutional concerns about introducing products in today’s public chains.
Ondo claims that its solution is being designed to address these pain points. It will allow for staking a series of vetted tokens whose collateral will be checked by validator nodes. These assets, which already pay a yield, will be dynamically picked by validators, reducing the costs of securing the chain and increasing opportunities to gain yield.
However, validators will be permissioned and subject to continuous monitoring to mitigate their involvement in malicious MEV practices. Also, the network will be linked to institutional platforms, to enhance the connection between on-chain assets and traditional finance liquidity.
Ondo has even designed a bridge to allow these assets to go multi-chain, secured by a subset of network validators. This feature will open the trusted experience to other chains and allow them to extend the liquidity to other growth ecosystems.
Ondo’s team envisions this platform to serve several use cases, including prime brokerage, using real-world assets as staking and collateral elements, decentralized management of wealth, stablecoin distribution, and securing new chains with re-staked Ondo assets.
The team has enrolled the collaboration of financial and tech powerhouses such as Franklin Templeton, Wellington Management, Wisdomtree, Google Cloud, ABN Amro, Aon, and Mckinsey, and the involvement of Blackrock, Paypal, and Morgan Stanley in this endeavor.
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