Ondo Finance, a leading player in tokenized real world assets (RWAS), has announced Ondo Chain, a layer-1 blockchain network designed to bridge the gap between traditional finance (Tradfi) and distributed finance (DEFI). The announcement was made at the first Ondo Summit and marked a major step in the evolution of facility-grade blockchain infrastructure.
“The financial markets are lagging behind due to upgrades.” I said Nathan Allman, CEO of Ondo Finance. “Today’s financial systems are plagued by high fees, access restrictions and operational inefficiencies. At Ondo, we are tackling these challenges head-on by creating a unified ecosystem that bridges traditional funds with the capabilities of blockchain technology.”
With Ondo Chain, the company aims to address key challenges in tokenizing real assets, ensuring security, compliance and interoperability while maintaining the efficiency and transparency of public blockchains like Ethereum.
Why the ONDO chain? Address key infrastructure challenges
Ondo Finance has identified several barriers to scaling tokenized securities on blockchain networks. These include:
1. Incompatibility with public securities
Traditional financial instruments such as corporate stocks and government bonds have complex mechanisms such as dividends, splits, and corporate behavior. These features do not align well with existing defi protocols, making integration difficult.
2. Fragmentation of the entire blockchain
Currently, RWA is issued across multiple blockchains, leading to liquidity fragmentation and increased operational complexity for issuers and investors. Ondo Chain aims to provide a unified ecosystem to promote cross-chain interoperability.
3. High and unstable transaction fees
Most blockchain networks require fees paid with unstable native tokens like ETH, causing unpredictable costs. Ondo Chain aims to stabilize trading fees by allowing tokenized RWA staking and ensuring cost-effective transactions.
4. Security concerns in bridging and data feeds
A cross-chain bridging vulnerability has led to multiple well-known exploits, making security a key priority. Ondo Chain uses facility-grade validators and a decentralized validator network (DVN) for increased security.
5. Institutional he is due to regulatory concerns
Many regulated financial institutions are eschewing public blockchains due to compliance risks, frontline concerns and the inability to hold crypto assets. Ondo Chain is reportedly built with permitted validators to address these concerns, making it suitable for institutional capital markets.
How Ondo Chain solves these challenges
Ondo Chain introduces a hybrid approach that combines the openness of public blockchains with the security and compliance of permitted chains. Below is how Ondo Finance aims to solve your problems.
In-facility network security
1. Ondo chain validators can bet high quality RWA instead of volatile cryptocurrency.
2. This approach enhances network security while reducing the risks associated with crypto price fluctuations.
Validators permitted for compliance and fairness
1. Only regulated financial institutions and reviewed entities can function as validators.
2. This eliminates malicious MEV (maximum extractable value) strategies and frontline risk.
Native support for tokenized RWA
1. The ONDO chain is designed to seamlessly integrate tokenized real-world assets into the ecosystem.
2. For maximum transparency, asset chain balibators continuously validates the backing of your assets.
Cross-chain interoperability and omni-chie messaging
1. The ONDO chain has native bridging capabilities, eliminating the reliance on high-risk third-party bridge providers.
2. Seamless asset transfer across multiple blockchain networks improves liquidity and accessibility.
Facility grade governance
1. Governance follows a two-tier structure, allowing financial institutions and blockchain stakeholders to jointly oversee decisions.
2. The governance model ensures that networks evolve in alignment with regulatory and market needs.
Game changer for real-world asset tokenization?
According to Ondo Chian, the main benefits are:
- Global Accessibility – Tokenized assets will be available 24/7, eliminating the time limits of traditional markets.
- Reduce transaction costs – By allowing RWA staking, the network can operate at a lower rate than existing public blockchains.
- Stronger institutional participation – Built-in compliance measurements make it easier for regulated companies to participate in DEFI.
- Enhanced securitiesY – Permitted valiters and decentralized validators reduce the risk of hacks and financial fraud.
- Seamless obligation integration – Institutional assets are natively supported with lending, borrowing and staking protocols.
According to the Ondo team, Ondo Chain offers a unique combination of benefits compared to public and permitted blockchains, including:
- Unlike Ethereum & Solana, the Ondo chain is built specifically for RWAS, ensuring seamless compliance and integration.
- Unlike private permit chains, they maintain public accessibility while ensuring agency compliance.
- Unlike traditional finance, it offers immediate settlements, 24-hour trading and global liquidity access.
The announcement follows the launch of a tokenization platform designed by Ondo to bring stocks, bonds and funds to blockchain infrastructure.
Tokenization – converting traditional assets on the blockchain into digital tokens – is gaining momentum around the world. Reports from McKinsey, BCG, 21Shares and Bernstein predict that the tokenized real-world assets (RWA) market could reach trillions of dollars over the past decade.
