Tokenized RWAs go onchain as Ondo Finance launches institutional L1 blockchain

Ondo Finance has announced the launch of a new layer 1 blockchain designed to accelerate institutional adoption of real-world assets. 

Ondo Chain, built as part of Ondo (ONDO)’s push to bring capital markets onchain, is an L1 blockchain purpose-built for institutions. 

The RWAs-focused chain, which the Ondo team announced on Feb. 6, is the infrastructure that will support Ondo Global Markets, providing features and capabilities that will make institutional adoption of tokenized securities a reality.

Ondo’s team has been developing this project for several months and believes its launch will take institutional tokenization to the next level.

Current challenges in adopting tokenized securities that Ondo Chain seeks to overcome include incompatibility with decentralized finance, cross-chain liquidity fragmentation, and high transaction fees. Regulatory concerns, bridging issues, and network security risks also remain key hurdles.

Other platforms, including Sui (SUI) and Aptos (APT) are also eyeing this market.

To offer a solution to these challenges, the proof-of-stake blockchain combines the benefits of both public and permissioned chains. Public blockchains offer openness while permissioned chains allow for enhanced compliance and security features.

Apart from institutional-grade network security, and permissioned validators, native omnichain messaging and proof of reserves are some of the features built into Ondo Chain. Native support for RWAs in DeFi, allowing for dApps that offer access to borrowing, lending and staking with real-world assets is another key feature.

“Through these features, Ondo Chain will provide infrastructure purpose built for the tokenization of RWAs while catering to the comprehensive needs of both traditional and crypto-native investors. By combining the strengths of public and permissioned blockchains, Ondo Chain aims to foster a thriving ecosystem where the potential of tokenized RWAs is fully realized,” the Ondo team wrote.

Ondo Finance aims to create a cost-effective experience for investors, encourage broader financial institution participation, and support further development across crypto wallets, protocols, and applications. The goal is to deliver a blockchain network that bridges decentralized finance with traditional finance.

According to data from RWA.xyz, the global market for tokenized real-world assets has grown steadily over the past year. Major players such as BlackRock have contributed to this expansion, bringing the total value of tokenized assets onchain to over $17 billion. Meanwhile, Ondo’s $650 million market share is part of the $3.5 billion tokenized U.S. Treasuries market.