The new functionality enables approved institutions to mint Ondo Stocks by transferring underlying shares from their Alpaca accounts to Ondo via an automated book transfer. This process, currently live on Ethereum and BNB Chain, reverses for redemptions, where tokens are exchanged back for the underlying securities. By removing the need to source separate cash for minting, the integration eliminates financing costs and timing mismatches that previously hindered market makers.
Ondo Finance Enables Direct In-Kind Conversion for Tokenized Stocks
Ondo Finance has introduced a new primary market mechanism allowing institutions to convert existing share inventory directly into tokenized stocks. By integrating with Alpaca's Instant Tokenization Network, the platform bypasses previous cash-funded requirements, aiming to improve capital efficiency and liquidity depth across secondary markets.
This shift is designed to strengthen liquidity for tokenized assets on decentralized exchanges and other trading venues. By facilitating a more seamless flow between traditional shares and onchain positions, the model allows for tighter spreads and more responsive inventory management. Access remains restricted to institutions that meet specific onboarding criteria and maintain active accounts with both Ondo and Alpaca.
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