USDY (US Dollar Yield Token) is a tokenized dollar supported by short-term US Treasuries and bank deposits. It aims to provide the ease of a stablecoin with higher yield. Unlike traditional stablecoins, USDY allows holders to earn the majority of the yield from its backing assets. While it can be easily transferred, onboarding is required for minting or redeeming.
History of USDY Token
Ondo Finance, led by CEO and founder Nathan Allman, launched the Ondo US Dollar Yield (USDY) token in August 2023. USDY, developed by Allman and Ian De Bode, is a unique yield generation token that makes use of real-world assets such as US Treasuries and DeFi protocols.
By August 2024, USDY expanded its availability to Arbitrum, allowing users in this ecosystem to benefit from its yield-generating capabilities. This move highlighted Ondo Finance's dedication to offering more DeFi infrastructure for USDY.
On March 3, 2025, USDY achieved a significant milestone by exceeding $1 billion in total value locked (TVL). This result demonstrated the token's growing popularity and adoption as a reliable, institutional-grade, tokenized representation of US Treasuries.
USDY expanded its reach in April 2025, when it became available on multiple blockchain networks such as Ethereum, Solana, Arbitrum, Sui, Aptos, Mantle Network, Plume Network, and Noble. This significant multichain compatibility sets USDY apart from many other stablecoins, providing users with unparalleled flexibility and reach.
What Makes USDY Unique
Ondo US Dollar Yield (USDY) offers several distinctive features that set it apart from other stablecoins like USDC and USDT.
USDY is a yield-bearing stablecoin. Unlike traditional stablecoins, which primarily serve as a means of transferring or storing value, USDY is designed to provide a consistent yield by utilizing DeFi protocols like lending, liquidity pools and yield farming. This makes it an ideal option for users seeking both stability and yield generation.
USDY stands out due to its asset backing. It is supported by US Treasuries, which lends a high level of security and reliability. This approach contrasts with other stablecoins that often rely on a more diverse and sometimes less transparent asset base. Stablecoin issuers often have the ability to change the types of assets backing their coins without holders' input. To protect USDY holders, Ankura Trust Company acts as both the Verification Agent and Collateral Agent. It enforces strict eligibility criteria and can initiate a wind-down process if these criteria are not met.
One critical difference is stablecoins are typically issued by operating companies, and if these issuers go bankrupt for any reason, holders might be unable to redeem their coins. However, USDY is issued by Ondo USDY LLC, which is structured to be bankruptcy-remote, a setup designed to be protected from the risk of bankruptcy, from other entities, including Ondo's operating companies.
USDY places significant emphasis on regulatory compliance. It is specifically designed to align with securities laws, which may result in a regulatory environment that differs from other stablecoins like USDT. This focus on compliance enhances its credibility and appeal for users who prioritize legal assurances and transparency.
USDY promises timely redemptions of tokens to USD. If stablecoin issuers delay redemption, there is typically no automatic wind-down or declaration of default. Holders might need to pursue legal action to recover assets. However, if Ondo USDY LLC fails to meet redemption requests promptly, an Event of Default is triggered, requiring Ankura Trust to liquidate the investment portfolio and repay holders, pending approval from USDY holders.
Unlike traditional stablecoins, when minting USDY the user must wait 40-50 days before the tokens become transferable. This unique mechanic may impact user engagement and liquidity availability.
Use Cases for USDY Token
USDY offers a versatile range of financial benefits tailored to both individuals and institutions. By holding USDY, users can earn yields based on the performance of underlying assets. This makes USDY a great option for those seeking to enhance their portfolio returns with a stable, yield-bearing asset.
For institutions, USDY provides a unique opportunity to gain exposure to tokenized U.S. Treasuries, facilitating a streamlined entry into the digital asset space. This feature is particularly appealing to institutions looking to diversify their holdings with secure and reliable options.
In the decentralized finance (DeFi) space, USDY is highly adaptable. It can be utilized within protocols such as Aave and Compound for lending and borrowing, and it is available for trading on decentralized exchanges like Uniswap, 1inch and Camelot. This integration expands its utility across a variety of DeFi platforms, enhancing liquidity and accessibility.
You can buy, hold, and bridge USDY in the MEW Mobile app if you prefer using mobile, or by downloading the Enkrypt browser extension if you prefer using a web browser.
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