- Ondo Finance will launch its own layer 1 blockchain.
- Ondo Chain, targeted at traditional financial institutions, will feature an invite-only list of validators.
- “You as an institution can actually run a node without ever having to touch crypto,” an Ondo executive said.
Ondo Finance, one of the largest issuers of tokenised US Treasury bonds, will launch its own blockchain in an attempt to lure Wall Street investors to crypto.
The blockchain, dubbed Ondo Chain, was developed with input from some of the world’s largest financial institutions, Ian De Bode, Ondo’s chief strategy officer, said at Ondo Summit, a daylong conference at a theatre overlooking Manhattan’s Columbus Circle on Thursday.
With Ondo Chain, Ondo Finance is attempting to create a “hybrid” platform “combining the openness of public blockchains with the compliance and security features of permissioned chains,” De Bode said at the conference, attended by DL News.
Crypto-curious financial institutions, wary of public blockchains that can be accessed by anyone in the world — including North Korean hackers — have created invite-only blockchains of their own, those experiments have largely been failures.
To address Wall Street’s fear of running afoul of regulators, validators on Ondo Chain will be invite-only.
“This means that only known and reputable — and often regulated — institutions will be allowed to run a validator,” De Bode said.
“This also means that when you as an investor come onchain, you can rest assured that your transactions are not going to be front-run, and you can enjoy similar protections like you do in traditional finance.”
Validators are the distributed network of computers that verify blockchain transactions. On public blockchains such as Ethereum, anyone can run a validator if they have the requisite hardware and meet other minimum requirements.
But Ondo Chain will also connect to public blockchains, said De Bode, who likened it to a “distribution hub.”
True to Ondo’s focus on so-called real-world assets — tokenised stocks, bonds, and commodities such as gold — Ondo Chain users will be able to stake RWAs and use them to pay transaction fees.
“The network will be proof-of-stake, but powered by real world assets,” De Bode said.
“You as an institution can participate and run a node just with the assets that you’re already holding on your balance sheet,” he continued. “This also means that you as an institution can actually run a node without ever having to touch crypto. I’m sure that will make some people in your compliance and accounting department extraordinarily happy.”
Ondo’s token, ONDO, fell 6% on the news Thursday, to $1.29.
Aleks Gilbert is DL News’ New York-based DeFi correspondent. You can contact him at aleks@dlnews.com.