Ondo Finance, a decentralized lending protocol, launched a tokenized fund that enables stablecoin holders to invest in bonds and US Treasuries and receive ownership tokens on the Ethereum blockchain.

The company stated that this fund will process daily subscriptions and redemptions in both stablecoins and fiat currencies. Investors will be able to transfer ownership tokens between whitelisted investor addresses and smart contracts that pass a compliance review to engage in on-chain trading and lending with fund tokens. The fund, which will be managed by Ondo, will have three tokenized classes, each investing in a single ETF from either Blackrock or PIMCO. 

Analyst QuickTake: With this announcement, Ondo Finance joins banking giant JPMorgan (JPM), which also announced plans to enable the tokenization of non-crypto assets such as US treasuries and money market funds for DeFi developers in June of last year. These types of DeFi products could potentially bring numerous institutional clients into the DeFi space—which has seen its total value locked (TVL) drop by ~74% year-over-year as of January—by offering access to relatively low-risk yields backed by traditional assets.