ONDO Soars 8% As Major Derivatives Exchanges Consider BlackRock's BUIDL Collateral Option

Real-world asset tokenization platform Ondo Finance's governance token (ONDO) surged by 8% following reports that BlackRock is in discussions to list its tokenized money market fund, BUIDL, as collateral for derivatives trading on major exchanges such as Binance, Deribit, and OKX.

Key Takeaways

• BlackRock is exploring the use of its tokenized money market fund BUIDL as collateral for derivatives trading.

• ONDO's price reached 79 cents, marking a nearly 9% increase over the past 24 hours.

• Tokenized money market funds allow traders to earn yields while using them as margin for trading.

BlackRock's Initiative

According to Bloomberg, BlackRock and its issuance partner Securitize are in early talks with leading crypto exchanges to accept BUIDL as margin for derivatives trading. This move could significantly impact the trading landscape, allowing traders to utilize their assets more efficiently.

ONDO's Market Performance

Following the news, ONDO's price jumped to 79 cents shortly after the report, reflecting an 8% increase within an hour. Although it later pared some gains, the token still showed a nearly 9% rise over the last 24 hours, outperforming the broader CoinDesk 20 Index, which gained 2.2% during the same period.

The Appeal of Tokenized Collateral

Tokenized money market funds like BUIDL offer a unique advantage: they allow traders to earn a yield while using them as collateral for margin trading, rather than relying solely on stablecoins. This innovative approach could reshape how traders manage their assets and leverage their positions in the market.

Growth of Tokenized Assets

BUIDL is currently the largest tokenized offering in the market, boasting over $550 million in assets. Its price is fixed at $1, providing investors with money market yields without leaving the blockchain ecosystem. The minimum investment for BUIDL is set at $5 million, targeting institutional investors and protocols.

Future Prospects

The tokenization of U.S. Treasuries, backed by short-term government bonds, has also seen significant growth, expanding to a $2.3 billion asset class within the crypto space. This growth is fueled by funds and protocols using these tokens as a means to park their on-chain cash while earning yields. The next frontier for this market may involve gaining acceptance as on-chain collateral assets.

Institutional Interest

State Street has recognized the potential of tokenized collateral in traditional finance. Donna Milrod, the bank's chief product officer, noted that collateral tokens could help alleviate liquidity stress during financial crises, allowing pension funds to post money market tokens for margin calls without needing to sell underlying assets to raise cash.

As the market evolves, the integration of tokenized assets into traditional trading practices could pave the way for a more efficient and yield-generating trading environment.

Sources

• ONDO Spikes 8% as Major Derivatives Exchanges Mull BlackRock's Tokenized RWA as Collateral Option, CoinDesk.

• El token ONDO se dispara 8% mientras los principales mercados de derivados aceptan BUIDL, de BlackRock, como opción colateral, CoinDesk.

• ONDO sobe 8% enquanto grandes bolsas de derivativos consideram o RWA tokenizado da BlackRock como opção colateral, CoinDesk.

• ONDO подскочил на 8%, так как основные биржи деривативов рассматривают токенизированный RWA BlackRock в качестве варианта обеспечения, CoinDesk.

• ONDO sale dell'8% mentre i principali exchange di derivati ​​valutano l'RWA tokenizzato di BlackRock come opzione collaterale, CoinDesk.