How It Works
Ondo Finance purchases US Treasury bills and bank demand deposits, placing them in a bankruptcy-remote special purpose vehicle (SPV). USDY tokens represent beneficial ownership interests in this SPV. The token's price increases daily as Treasury interest accrues (currently around 5% APY before fees). Non-US qualified purchasers and certain institutional investors can access USDY after a 40–50 day lockup for new mints (regulatory requirement). Once in the secondary market, USDY trades freely. Redemption is available to eligible holders who request USD wire transfers back to their bank account.
Backing Type: RWA-Backed
Real World Asset (RWA) stablecoins are backed by tokenized real-world financial instruments — primarily US Treasury bills, money market funds, or corporate bonds. The yield from these instruments can be passed to holders, making RWA stablecoins inherently yield-bearing.