Ondo Finance has announced a new feature enabling approved institutions to convert their stocks and exchange-traded funds (ETFs) directly into tokenized equivalents or redeem such tokens back to the original assets.
Direct tokenization for institutional investors
Through the newly launched service, institutions meeting eligibility requirements can now transfer their shares from Alpaca accounts to Ondo Finance via an internal book transfer. In return, Ondo issues onchain representations of these shares, known as Ondo Stocks tokens. The process can also be reversed, with institutions having the option to redeem the tokens for the actual underlying shares.
Alpaca is a known brokerage platform that offers trading and investment solutions, primarily serving fintech applications and brokers by providing APIs for stock and crypto trading.
Previously, institutions using Ondo’s platform had to commit cash to mint tokenized versions of assets, even if they already held the corresponding shares. The new in-kind conversion method lets these clients use shares they already own, eliminating the need to lock up additional capital during the tokenization process.
Ondo Finance stated that this development is intended to lower financing costs and minimize potential timing mismatches between traditional equities and their tokenized forms.
Platform access and technical details
Currently, the conversion system operates on both Ethereum and BNB Chain networks. Only institutional clients pre-approved by Alpaca can participate, and they must hold active accounts with both Alpaca and Ondo.
By focusing on this model, Ondo Finance aims to streamline tokenization and make it more capital efficient for established financial institutions.
Mini dictionary: Alpaca, a brokerage infrastructure platform that provides API-based access to stock and cryptocurrency trading for fintechs and brokers.
Ondo’s position in the tokenization market
Ondo Finance has quickly grown to become one of the most significant players in the digital asset tokenization space. Based on onchain value, it is now the second largest tokenization platform.
Data from RWA.xyz indicates that Ondo manages approximately $3.63 billion in distributed tokenized assets across 441 products, positioning it just behind Securitize, a firm specializing in compliance-driven asset tokenization.
| Platform | Onchain Value | Number of Products | Ranking |
|---|---|---|---|
| Securitize | Higher than $3.63 billion | Not specified | 1st |
| Ondo Finance | $3.63 billion | 441 | 2nd |
As the tokenization market evolves, competition among top platforms continues to intensify, with Ondo Finance aiming to gain ground by introducing new capital-efficient solutions for large-scale investors.
Institutions with active accounts at both Alpaca and Ondo are now able to convert stocks and ETFs directly into tokenized assets or redeem them for the original securities, streamlining the tokenization process and potentially lowering costs.
