Ondo Finance Launches Its Own Blockchain in a Bid 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

Tokenised US Treasury bond issuer Ondo Finance is launching its own blockchain in a bid to bring Wall Street investors to crypto.

The blockchain, called Ondo Chain, was built 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 theater overlooking Manhattan’s Columbus Circle on Thursday.

With Ondo Chain, Ondo Finance is trying 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, which was covered by DL News.

Financial institutions that are curious about crypto but wary of public blockchains that can be accessed by anyone in the world — including, say, North Korean hackers — have created their own invite-only blockchains, but those experiments have mostly fizzled out.

In a bid 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,” said De Bode.

“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 like Ethereum, anyone can run a validator if they have the requisite hardware and meet other minimum requirements.

However, Ondo Chain will also connect to public blockchains, said De Bode, likening it to a “distribution hub.”

In keeping with Ondo’s focus on so-called real-world assets — tokenized stocks, bonds, and commodities like gold — users of Ondo Chain 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,” said De Bode.

“You as an institution can participate and run a node just with the assets that you’re already holding on your balance sheet,” he added. “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, slipped 6% on the news Thursday, trading at $1.29.

Aleks Gilbert is DL News’ New York-based DeFi correspondent. You can reach him at aleks@dlnews.com.