Ondo Finance’s Token Recovery and New Proposals

Ondo Finance’s token has shown a notable recovery after developers submitted a proposal to introduce the OUSG stablecoin to Sky, the platform formerly known as MakerDAO.

Ondo Finance Token Performance

The Ondo Finance token has risen for the second consecutive day, reaching a high of $0.7500, its highest level since August 25. In a recent statement, Ondo Finance developers announced their collaboration with Blackrock and Securitize to add the OUSG proposal to the Spark Tokenization Grand Prix, which aims to onboard $1 billion in tokenized assets.

Understanding the OUSG Token

Ondo’s OUSG is a tokenized product with over $227 million in assets, offering holders monthly rewards. The annual APY for OUSG stands at 5.11%, generated from U.S. government treasuries through the Blackrock USD Institutional Digital Liquidity Fund. This token is available to institutional investors and includes a 0.15% fee.

In addition to OUSG, Ondo Finance operates a more popular US dollar yield token, USDY, which yields 5.35% and holds over $400 million in assets. Unlike OUSG, USDY is also exclusively available to institutional investors.

Ondo Finance’s Asset Growth

The new proposal comes at a time when the total assets in Ondo Finance have surged to a record high of $616 million. Most of these assets are on the Ethereum chain, followed by Solana, Mantle, and Aptos.

Impact of Falling Interest Rates

A key concern for Ondo Finance is the potential loss of assets as investors move away from government bonds now that the Federal Reserve has started cutting interest rates. In its recent decision, the Fed delivered a significant cut of 0.50% and hinted at more cuts in the future. As a result, the benchmark 10-year yield has retreated to 3.7% from this year’s high of over 4.6%.

Falling Interest Rates Are a Boon for Yieldcoins

Ondo Finance’s CEO, Nathan Allman, has refuted the idea that lower interest rates would lead to a shift toward riskier assets. In a recent discussion, he noted that yield tokens like Ondo could benefit when rates start falling, as investors move to riskier assets like crypto. He cited the example of the USDC stablecoin, which added billions in assets when the Fed began cutting rates in 2020.

Technical Analysis: Ondo Token

The Ondo token bottomed at $0.54 earlier this month as most cryptocurrencies experienced a pullback. It has now bounced back, crossing the 50-day moving average and the 61.8% Fibonacci retracement point. The Relative Strength Index (RSI) and the moving average convergence/divergence (MACD) have also continued rising, indicating that the token is gaining momentum.

Additionally, the volume in the spot market has been rising, while the futures open interest reached $107 million, its highest level since August 25. Therefore, Ondo is likely to continue its upward trend, with the next reference level being the 50% retracement point at $0.8392.

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