Ondo Finance's USDY (US Dollar Yield) is a yield-bearing token backed by short-term U.S. Treasuries and bank demand deposits, designed to deliver regulated, on-chain returns to eligible investorsOndo Finance's USDY (US Dollar Yield) is a yield-bearing token backed by short-term U.S. Treasuries and bank demand deposits, designed to deliver regulated, on-chain returns to eligible investors

新手學院/區塊鏈百科/熱門概念/Ondo Finance Yield Explained: How to Earn Low-Risk Returns on USDY

Ondo Finance Yield Explained: How to Earn Low-Risk Returns on USDY

作者：Emma Williams

初階

Sep 21, 2026Emma Williams

14 分鐘

ONDO$0.48604-7.72%

DEFI$0.0001088+2.06%

Ondo Finance's USDY (US Dollar Yield) is a yield-bearing token backed by short-term U.S. Treasuries and bank demand deposits, designed to deliver regulated, on-chain returns to eligible investors worldwide. Unlike traditional stablecoins that keep yield for the issuer, USDY passes interest directly to token holders through an accumulating price mechanism, generating approximately 3.4% APY as of early April 2026 without active management or lock-up periods.

Key Takeaways

USDY is a tokenized note issued by Ondo USDY LLC, backed one-to-one by short-term U.S. Treasuries and bank demand deposits, with a 4% overcollateralization buffer providing an additional safety layer.
Yield accrues daily and is reflected either through a rising token price (USDY, accumulating) or additional tokens credited to the holder's wallet (rUSDY, rebasing).
As of early April 2026, USDY and OUSG yield approximately 3.4% APY, trailing the 10-year Treasury rate of 4.33–4.44% due to shorter duration and operational costs, but offering on-chain composability that raw Treasury exposure cannot match.
USDY is live across eight blockchains including Ethereum, Solana, Arbitrum, Sui, Aptos, Mantle, Noble, and Plume Network, enabling cross-chain DeFi strategies that competitors have largely overlooked.
U.S. and U.K. residents are ineligible to mint directly; redemptions are processed in 2–3 business days with a $500 minimum.

Introduction

For most of crypto's history, stablecoins have operated as a one-sided arrangement. The holder absorbs the currency risk of pegging to the dollar while the issuer captures all the interest generated by the reserves backing that peg. USDT and USDC generate billions in annual yield for Tether and Circle respectively; the token holder receives nothing. USDY, issued by Ondo Finance, restructures this arrangement entirely.

Rather than holding a fixed $1.00 peg, USDY is structured as a senior secured note whose redemption value rises over time as the underlying Treasuries earn interest. The result is a token that behaves like a stablecoin in terms of liquidity and composability, but functions like a short-duration bond fund in terms of yield distribution. For non-U.S. investors seeking regulated, dollar-denominated returns without navigating a traditional brokerage, it represents a structurally novel instrument; it is also an increasingly well-capitalized one, with over $1.64 billion in total value locked as of early April 2026. For a broader understanding of what Ondo Finance is and how its full product suite operates, that context anchors everything discussed in this article.

What Is USDY? The Yield-Bearing Stablecoin Alternative

USDY is a yield-bearing digital token issued by Ondo USDY LLC, a subsidiary of Ondo Finance, and available to eligible investors outside the United States and United Kingdom. Its primary function is to convert exposure to short-term U.S. government securities into a composable, on-chain instrument that can be held passively or deployed across DeFi protocols. The token launched in August 2023 and has since expanded to eight blockchain networks, establishing it as one of the most widely distributed yield-bearing instruments in the tokenized asset space.

How USDY Differs from Traditional Stablecoins

The distinction between USDY and a conventional stablecoin is structural, not superficial. A traditional stablecoin like USDT targets a fixed $1.00 redemption value and generates no return for its holder. The issuer retains the yield earned on reserve assets, such as Treasury bills, commercial paper, or bank deposits, as operating revenue. USDY inverts this model: the yield generated by custodied Treasuries flows through to the token holder, either by increasing the token's redemption price or by distributing additional tokens to the holder's wallet. Chainlink's explainer on yield-bearing stablecoins describes this shift as transforming stablecoins from idle liquidity into productive assets that rival traditional money market funds in utility. For a direct comparison of how traditional stablecoins like USDT are structured and what risks they carry, the contrast with USDY's yield-passing architecture becomes immediately apparent.

What Backs USDY: Treasuries, Deposits, and Overcollateralization

Every unit of USDY in circulation is backed by a combination of short-term U.S. Treasury bills and bank demand deposits, both classified as cash equivalents under U.S. accounting standards. The issuer maintains a 4% overcollateralization buffer at all times, meaning that for every $100 in outstanding USDY, at least $104 in reserve assets is held. This buffer absorbs short-term fluctuations in the value of the underlying securities without impairing redemption. The reserve composition and daily attestations are published on a rolling basis, giving holders continuous visibility into the backing quality. Live reserve and holder data for USDY is tracked independently at RWA.xyz's USDY asset page, which aggregates on-chain metrics including TVL, holder count, and monthly transfer volume. Ondo USDY LLC operates as a bankruptcy-remote special purpose vehicle, legally separating the reserve assets from Ondo Finance's corporate balance sheet; this structural feature is discussed further in the security section below.

How USDY Yield Works: Accumulating vs. Rebasing

Ondo offers two versions of the same underlying instrument, differentiated by how yield reaches the holder. The choice between them is primarily a tax and accounting decision rather than a yield decision, since both versions produce economically equivalent returns from the same reserve pool.

USDY: The Accumulating Model

In the accumulating version, the number of tokens a holder owns stays constant while the redemption value of each token increases over time. A holder who mints 1,000 USDY at an initial price of $1.00 still holds 1,000 tokens six months later, but each token is now redeemable for a higher dollar amount reflecting the interest accrued. By early April 2026, USDY's price had reached approximately $1.13, reflecting cumulative interest earned since the token's August 2023 inception. This structure is beneficial for holders in jurisdictions where receiving additional tokens constitutes a taxable event at the moment of receipt, since the accumulating model defers realisation until the holder sells or redeems.

rUSDY: The Rebasing Model

The rebasing version, rUSDY, maintains a fixed $1.00 face value at all times. Instead of the token price rising, new rUSDY tokens are distributed directly to the holder's wallet each day in proportion to the yield earned. A holder with 1,000 rUSDY on a given day might find 1,000.93 rUSDY in their wallet the following morning, with the increment representing one day of accrued interest. USDY and rUSDY are freely convertible into each other at any time without penalty, allowing holders to switch models as their accounting or payment needs change.

Which Version Is Right for You?

The accumulating model suits long-term holders and those using USDY as a yield-generating store of value, particularly in jurisdictions where token appreciation is taxed only upon disposal. The rebasing model suits users who need a stable $1.00 unit for payments, B2B settlements, or accounting systems that require a fixed-price denominator while still capturing daily yield. Neither version carries a fee advantage over the other; both draw from the same underlying reserve yield, net of Ondo's spread.

Current USDY Yield: Benchmarks and Context

USDY and OUSG APY as of Early April 2026

The table below summarises yield data sourced from DefiLlama and RWA.xyz as of early April 2026. These figures represent trailing historical APY calculated on a 30-day net income basis, updated on weekdays.

Product	Trailing APY	Methodology	Source
USDY	~3.4%	Implied via short-term Treasury backing; mirrors pool averages	DefiLlama / RWA.xyz
OUSG	3.43%	Native yield from Ondo I LP; 30-day net income, weekday updates	DefiLlama
Ondo Pools (avg)	3.44%	Average across 13 tracked pools as of April 10, 2026	DefiLlama

Yields are set monthly and reflect past performance rather than a guaranteed forward rate. They fluctuate with the federal funds rate environment and the composition of the underlying reserve portfolio.

How Ondo Yields Compare to the 10-Year Treasury

As of late March to early April 2026, the 10-year U.S. Treasury yield traded in a range of 4.33% to 4.44% according to the Federal Reserve's DGS10 series on FRED, sitting approximately 90 to 100 basis points above USDY's ~3.4% yield. This spread exists for three structural reasons. First, USDY's reserves are concentrated in short-duration instruments, specifically Treasury bills and overnight bank deposits, which carry no term premium. The 10-year Treasury's higher yield compensates investors for committing capital over a decade; USDY holders face no such lock-up. Second, Ondo retains a portion of the gross yield generated by the reserve pool as operating revenue, creating a net yield to the holder that is lower than the raw T-bill rate. Third, the KYC onboarding process and 40–50 day initial issuance window add friction that pure Treasury exposure does not carry, and the yield differential partially compensates for this. The tradeoff is composability: a holder of physical T-bills cannot deploy that exposure as collateral on a DeFi lending protocol at 3 AM on a Sunday, but a USDY holder can.

How to Access and Redeem USDY

Eligibility, KYC, and Geographic Restrictions

USDY is not available to residents or citizens of the United States or the United Kingdom minting directly through Ondo's platform, though U.S. or U.K. citizens residing abroad may be eligible depending on their jurisdiction. All applicants must complete a KYC and AML verification process at onboarding, submitting identity, legal, and tax documentation. Ondo applies these checks to comply with U.S. securities law, the Investment Company Act of 1940, and equivalent international regulations. Ondo's written submission to the SEC's crypto task force outlines the regulatory framework underpinning USDY's issuance model and the company's views on how tokenized securities should be classified under U.S. law. Once verified, access to USDY is permissionless in the secondary market across the supported chains; KYC is required only at the point of primary issuance and direct redemption.

Minting, Redemption Timelines, and Minimum Amounts

Primary minting is conducted through Ondo's platform using USDC or U.S. dollar wire transfers for amounts above $100,000. The minimum investment and redemption amount is $500. After an initial deposit, USDY tokens are issued 40 to 50 days later, though yield accrual begins from the first day of the investment; the delay applies to token delivery, not earnings. Redemptions are processed in approximately 2 to 3 business days from the date of request and are settled in U.S. dollars to bank accounts held outside the United States. There are no performance or management fees charged directly to holders; Ondo's revenue comes from retaining a portion of the gross yield on the underlying reserve assets.

USDY Across Chains: Multi-Chain Deployment

Most existing guides to USDY treat it as an Ethereum-native instrument. That characterisation was accurate at launch in 2023 but significantly understates the token's current reach. As of early 2026, USDY is live on eight blockchain networks: Ethereum, Solana, Arbitrum, Sui, Aptos, Mantle Network, Noble (an asset issuance chain within the Cosmos ecosystem), and Plume Network. Cross-chain transfers are facilitated via LayerZero, making USDY one of the most composable tokenized yield instruments available across multiple DeFi ecosystems simultaneously.

Each deployment opens distinct strategic opportunities. Solana's low transaction costs and high throughput make USDY particularly attractive for high-frequency DeFi interactions, and Messari identified USDY as the largest yield-bearing RWA by market cap on Solana as of mid-2025. Arbitrum's deep liquidity pools and established lending markets allow USDY to function as collateral with tighter spreads than on smaller chains. Sui and Aptos, both relatively newer ecosystems with active liquidity incentive programs, have at various points offered enhanced rewards for USDY liquidity providers, creating opportunities for yield stacking beyond the base Treasury rate. Noble's Cosmos integration extends USDY into the IBC-connected ecosystem, reaching chains and applications that neither Ethereum nor Solana serve directly.

The practical implication is that a holder willing to bridge across chains (a process that typically takes minutes and costs a fraction of a cent on most supported networks) can access meaningfully different yield environments without changing the underlying instrument. The base Treasury yield travels with the token regardless of which chain it lives on.

Advanced Strategy: Deploying USDY in DeFi

Passive holding of USDY delivers the base Treasury yield. Active deployment within DeFi can compound that return, though each strategy introduces its own risk layer on top of the base instrument's credit and custody exposure. Understanding how stablecoins function as productive assets within DeFi liquidity ecosystems provides useful context for the strategies below.

Using USDY as Collateral

USDY can be posted as collateral on lending protocols that support it, including Flux Finance (Ondo's original lending layer, now operated by Neptune Foundation) and Takara Lend on Berachain. The mechanics work as follows: a holder posts USDY as collateral, borrows a stablecoin such as USDC against it, and deploys the borrowed capital elsewhere. Because the collateral itself earns ~3.4% APY, the effective borrowing cost is reduced by that amount. If borrowing costs on USDC are 4%, the net cost of the loan is closer to 0.6% when the collateral's yield is factored in: a materially cheaper credit facility than cash collateral would provide. The risk is liquidation if the USDY price experiences unexpected volatility or if the lending protocol's parameters change, so position sizing and loan-to-value ratios require careful management.

Liquidity Provision and Fee Compounding

USDY can be paired with other stablecoins, most commonly USDC or USDT, in liquidity pools on decentralised exchanges such as Uniswap (Ethereum), Cetus (Sui), and various Solana-native AMMs. A liquidity provider in a USDY/USDC pool earns two simultaneous returns: the base Treasury yield accruing to the USDY portion of the position, and a share of the trading fees generated by the pool. On chains with active liquidity incentive programs, a third layer of reward tokens may also accrue. The primary risk specific to this strategy is impermanent loss, though USDY/USDC pools are low-volatility pairs and impermanent loss in this context is typically minimal. For investors already comfortable with vault-based passive yield strategies, how protocol vaults compound returns over time illustrates the same compounding logic that applies to USDY liquidity positions.

Security, Transparency, and Risk Considerations

Bankruptcy Remoteness and the SPV Structure

USDY is issued by Ondo USDY LLC, a standalone special purpose vehicle legally separate from Ondo Finance Inc., the parent company. This structure is commonly called bankruptcy remoteness: if Ondo Finance as a corporate entity were to face insolvency, the reserve assets backing USDY are ring-fenced within the SPV and are legally reserved for token holders rather than available to general creditors. The SPV operates with its own board of directors including an independent director, maintains segregated asset reporting, and publishes daily transparency reports alongside monthly reserve attestations conducted by third-party accounting firms. This governance architecture is meaningfully more robust than most crypto-native yield instruments, which offer no equivalent structural protection. For comparison, how USDT's reserve audits and compliance framework are structured illustrates the range of reserve transparency approaches across the stablecoin market; USDY's SPV model sits at the more regulated end of that spectrum.

Smart Contract and Counterparty Risk

The SPV structure protects against issuer insolvency but does not eliminate all risk. Smart contract vulnerabilities remain a live concern for any on-chain instrument: a flaw in USDY's minting, transfer, or redemption contracts could theoretically be exploited to create tokens without backing or to prevent legitimate redemptions. Ondo has engaged multiple independent auditors for its core contracts, and the protocol demonstrated its ability to respond to on-chain incidents when it froze stolen USDY tokens promptly following the April 2026 Drift protocol exploit: a response that underscores both the existence of administrative controls and the custodial nature of those controls. Counterparty risk at the reserve level is also present: USDY's backing depends on the solvency of the custodians holding the Treasury securities and bank deposits. These custodians are regulated U.S. financial institutions, but no custody arrangement is completely immune to risk. Investors should size USDY allocations accordingly and treat it as a low-risk rather than a zero-risk instrument. BitGo's institutional guide to stablecoin yield risk provides a practical framework for evaluating custody quality, reserve transparency, and liquidity constraints across yield-bearing structures of this type.

Frequently Asked Questions

What is the current APY on USDY?

As of early April 2026, USDY yields approximately 3.4% APY on a trailing 30-day basis, in line with Ondo's OUSG product at 3.43%. The rate is set monthly based on the yield generated by the underlying reserve assets and fluctuates with the federal funds rate environment.

Is USDY the same as a stablecoin?

USDY is structured as a senior secured note rather than a stablecoin. Its price is not pegged at $1.00; it accumulates value over time as interest accrues, reaching approximately $1.13 by early April 2026. The rebasing version, rUSDY, maintains a $1.00 face value while distributing yield as additional tokens. Neither version is a stablecoin in the traditional sense, though both share the liquidity and composability characteristics of stablecoins.

Who can invest in USDY?

USDY is available to eligible individuals and institutions outside the United States and United Kingdom. All applicants must complete KYC and AML verification. U.S. or U.K. citizens residing abroad may qualify depending on jurisdiction. Secondary market trading on supported chains is permissionless for verified holders.

How long does it take to receive USDY after minting?

Tokens are delivered 40 to 50 days after the initial deposit date. Yield accrues from day one of the investment, so the delay affects token delivery, not earnings. Redemptions process in approximately 2 to 3 business days.

What is the minimum investment?

The minimum amount for both investment and redemption is $500. Wire transfers in U.S. dollars are supported for amounts above $100,000.

What is the difference between USDY and rUSDY?

Both tokens represent the same underlying yield instrument. USDY accumulates yield by increasing the token's redemption price over time, leaving the holder's token count unchanged. rUSDY maintains a fixed $1.00 price and distributes yield as additional tokens credited to the holder's wallet daily. The two are freely interconvertible at any time.

Is USDY available on Solana?

Yes. USDY is live on Solana and had reached a market cap of approximately $175 million on that chain as of mid-2025, making it the largest yield-bearing RWA on Solana by market cap at the time. Cross-chain transfers use LayerZero infrastructure.

Conclusion

USDY occupies a genuinely novel position in the digital asset landscape: a regulated, yield-bearing instrument that passes Treasury returns to token holders while remaining composable across eight blockchain ecosystems. Its ~3.4% APY trails the 10-year Treasury rate, but that comparison omits the settlement infrastructure, cross-chain flexibility, and DeFi composability that make USDY a different kind of instrument rather than simply an inferior one. For non-U.S. investors seeking low-risk, dollar-denominated on-chain yield, the combination of SPV bankruptcy protection, daily transparency reporting, and multi-chain availability sets a benchmark that few competing products match. As the tokenized Treasury market continues to mature, having grown over 500% between early 2024 and April 2025 according to CoinGecko's RWA Report. USDY's infrastructure position gives it durable relevance regardless of short-term yield fluctuations.

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