Ondo US Dollar Yield (USDY)
USDY is a non-rebasing ERC20 token representing US Dollar yielding deposits with transfer restrictions managed via allowlist and blocklist.
Overview
USDY is an ERC20 token developed by Ondo that provides exposure to real-world assets (RWAs) through a non-rebasing yield-bearing token. Unlike rebasing tokens, USDY accrues value exclusively through price appreciation, making it similar to Ondo's OUSG token but with different transfer restrictions. USDY is designed for users who want to hold US dollar-denominated yield-bearing assets on-chain without undergoing the same KYC requirements as other Ondo tokens, instead gating transfers via an allowlist, blocklist, and sanctions list. This approach balances regulatory compliance with user accessibility.
The core of USDY's functionality is built on Ondo's RWAHub protocol, which manages subscriptions and redemptions of RWA tokens by interacting with third-party custodians that hold the underlying assets. Users mint USDY by depositing USDC and requesting a subscription; after off-chain asset purchases and price setting by trusted oracles, users can claim their USDY tokens. Redemption works similarly in reverse, with tokens burned to redeem USDC after asset liquidation. The protocol uses a pricer contract to synchronize prices with an oracle, ensuring accurate valuation.
USDY's architecture includes upgradeable proxy contracts following EIP-1967 standards, allowing for future upgrades without disrupting user balances. Transfer restrictions are enforced through external calls to allowlist, blocklist, and sanctions list contracts, ensuring compliance with regulatory requirements. The allowlist mechanism requires users to self-certify agreement to valid terms, while the blocklist and sanctions list prevent interactions with disallowed addresses. Developers can integrate USDY by interacting with the USDYManager contract, which also supports off-chain redemptions via wire transfers.
To get started, developers can deploy and test USDY using Ondo's open-source contracts and Foundry-based test suites. The repository includes scripts for local blockchain setup, testing, and gas reporting. Comprehensive contract documentation and audit reports for the oracle and pricing mechanisms are publicly available, supporting secure integration and development.
The Problem
Accessing yield-bearing real-world assets on-chain involves regulatory and compliance challenges, including KYC requirements and transfer restrictions. Managing accurate pricing and redemption processes for these assets is complex, especially when integrating off-chain custodians and oracles.
The Solution
Key Features
RWAHub protocol integration
Manages minting and redemption workflows by coordinating with custodians and trusted oracles.
Pricer and oracle synchronization
Ensures accurate and auditable price feeds for deposits and redemptions via external oracle calls.
Off-chain redemption support
Allows users to request redemptions serviced through wire transfers, expanding usability.
Key Strengths
How Developers Use Ondo US Dollar Yield (USDY)
Institutional exposure to real-world assets
Financial institutions can gain on-chain exposure to yield-bearing real-world assets without full KYC for every participant.
DeFi protocols integrating compliant stable yield tokens
DeFi developers can integrate USDY as a compliant, yield-bearing stablecoin alternative in their protocols.
Enterprise treasury management
Enterprises can use USDY to manage treasury assets on-chain with regulatory controls and upgradeable contract architecture.
Works Well WithEthereumMantleSolanaSui
Aptos
Noble 
Arbitrum One
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Pricing
Standard | |
|---|---|
| Price (Monthly) | Free |
| Price (Annual) | Free |
| Messaging | N/A |
| Support | Community support via GitHub |
| Analytics |
Resources
Ondo provides detailed documentation, open-source smart contracts, and audit reports to support developers integrating USDY. The GitHub repository includes testing frameworks and deployment scripts to facilitate local development and testing.