Ondo Finance and Block Street collaborate to integrate tokenized assets and ETFs with global liquidity.

Ondo Finance, a real-world asset tokenization platform, has partnered with Block Street to provide global liquidity for tokenized assets and ETFs. This collaboration aims to bridge the gap between traditional finance and decentralized finance, enabling the use of tokenized stocks as DeFi primitives for arbitrage, structured strategies, hedging, and capital efficiency. The integration will allow institutional asset managers, DeFi protocols, and developers to integrate tokenized offerings into structured financial products and create innovative offerings.

Ondo Finance, a real-world asset tokenization platform, has partnered with Block Street to provide global liquidity for tokenized assets and ETFs. This collaboration aims to bridge the gap between traditional finance (TradFi) and decentralized finance (DeFi), enabling the use of tokenized stocks as DeFi primitives for arbitrage, structured strategies, hedging, and capital efficiency. The integration will allow institutional asset managers, DeFi protocols, and developers to integrate tokenized offerings into structured financial products and create innovative offerings.

Tokenization is the process of representing assets like stocks, funds, etc., as digital tokens, allowing fractional ownership of these assets to investors. This process digitizes the traditional finance market, enables 24/7 on-chain trading, and makes assets more affordable due to fractional offerings [1].

The latest collaboration addresses the gap in tokenized offerings, which have remained rather static—assets that are traded but not deployed in trading strategies. Ondo Global Markets tokenizes U.S. equities and ETFs like Apple (Nasdaq: AAPL), Nvidia (Nasdaq: NVDA), and Tesla (Nasdaq: TSLA) and imports liquidity from traditional exchanges. Block Street's chain-agnostic hybrid liquidation engine offers an institutional-grade liquidity rail to these offerings to ensure real-time settlement [2].

This integration makes way for tokenized stocks to act as composable DeFi primitives. It means tokenized offerings can become useful financial tools for:
- Arbitrage: Exploiting price differences between markets.
- Structured strategies: Using complex trading techniques such as borrowing, shorting, and leverage.
- Hedging: Protecting against market risks.
- Capital efficiency: Generating more return from the same amount of capital.

The latest integration bridges TradFi and DeFi in an impactful manner. Institutional asset managers can integrate tokenized offerings into structured financial products. DeFi protocols can use tokenized stocks to create lending and vault markets to generate returns. Developers and investors can marry TradFi-level liquidity with DeFi-native programmability to offer innovative offerings.

Ondo Finance CEO Nathan Allman stated, "Our mission has always been to make stock trading as free and global as the internet." Block Street co-founder Hedy Wang added, "Integrating with Ondo supercharges this vision—unlocking liquid, composable access to equities for traders and DeFi protocols worldwide. Together, we’re turning tokenized stocks from static wrappers into financial primitives."

Backed by investors from Citadel, Point72, Jane Street, HRT, etc., Block Street claims to be the first permissionless unified liquidity layer for tokenized stocks. It debuted with $10 million in liquidity last week and has since attracted more than 200,000 testnet users [2].

References:
[1] https://www.thestreet.com/crypto/markets/ondo-finance-block-street-unlock-global-liquidity-for-tokenized-assets-and-etfs
[2] https://finance.yahoo.com/news/ondo-partners-block-street-unlock-163000007.html