Ondo Finance Ready to Launch Tokenized Equity and ETF on Solana—A New Phase of Real Market Transformation

Pelopor tokenization of real-world assets (RWA) expands the reach from fixed income instruments to 24/7 equity trading with a revolutionary asset custody structure

Ondo Finance has announced an ambitious plan to launch tokenized equity services and exchange-traded fund (ETF) on the Solana blockchain network in early 2026. This move marks a significant expansion of the real-world asset tokenization platform (RWA) beyond its current focus on Treasury bonds and money market funds, opening access to equity markets with a custody-based model that enables continuous trading and settlement around the clock.

Innovative Custody-Based Structure: Changing How Investors Trade Stocks

This initiative is among the boldest efforts to bridge traditional equity markets with blockchain infrastructure, potentially revolutionizing accessibility and flexibility in U.S. securities trading. Conventional stock markets operate about 6.5 hours per trading day (9:30 AM to 4:00 PM ET), with pre-market and after-hours sessions offering limited liquidity and wider spreads.

In contrast, Ondo’s tokenized stocks and ETFs will enable 24/7 trading with near-instant settlement via blockchain infrastructure. This custody-based approach sets Ondo apart from synthetic or derivative products—where the underlying assets are actually held in qualified custodians, ensuring each stock token represents authentic ownership of real shares or ETF units, not just derivative exposure.

The choice of the Solana blockchain leverages its high throughput capacity (m capabilities to handle thousands of transactions per second) and minimal transaction costs (typically just a few cents per transaction), making high-frequency trading and small-value transfers economical—significant advantages over Ethereum’s historically higher gas fees.

Proven Track Record in Real-World Asset Tokenization

Understanding Ondo’s ambitions in equities requires context from its mature position in tokenized fixed income products, demonstrating regulatory navigation capabilities and institutional partnerships.

USDY (U.S. Dollar Yield) is Ondo’s flagship product providing tokenized exposure to short-term Treasury and U.S. bank demand deposits, having accumulated over $500 million in assets under management since launch. OUSG (Ondo Short-Term U.S. Government Treasuries) offers institutional access to tokenized short-term government bonds with blockchain-based transfer and settlement capabilities.

The company has successfully navigated securities registration requirements, built relationships with traditional financial institutions providing custody and administration, and developed the necessary compliance infrastructure for regulated tokenized products. The existing USDY presence on Solana alongside Ethereum provides a technical foundation and network relationships supporting expansion into equity products.

Why Solana? Technical Architecture and Cost Efficiency Benefits

Solana’s blockchain infrastructure offers a unique combination of speed and economy not found on other platforms. The network can process thousands of transactions per second with negligible costs, creating ideal conditions for high-frequency trading and small-value transactions—highly valuable for retail markets seeking fractional share or dollar-amount investments.

Tokenized assets can be transferred, sold, or composited with other DeFi protocols without the usual barriers of high transaction fees or slow settlement speeds. This opens new opportunities for integration with decentralized financial services, providing scalability never before seen in traditional equity markets.

Regulatory Foundations: Challenges and Framework

The early 2026 timeline reflects the extensive regulatory approval process needed for tokenized equity securities in the U.S. under existing securities laws.

Securities registration with the SEC is a primary regulatory hurdle—tokenized stocks and ETFs clearly qualify as securities and require filing a registration statement or qualifying exemption before a public offering. Transfer agent regulations govern how securities ownership records are maintained, requiring Ondo or its partners to register as a registered transfer agent or use registered entities to track tokenized stock ownership.

Broker-dealer requirements may apply depending on how tokenized equities are distributed and traded, potentially requiring Ondo to register as a broker-dealer or collaborate with registered firms. Custodian regulations under SEC standards and banking rules mandate qualified custodians holding the underlying assets to meet strict operational, financial, and insurance requirements.

AML/KYC compliance mandates robust “know your customer” procedures and anti-money laundering monitoring, creating tension between blockchain’s pseudo-anonymous privacy and securities compliance. Accredited investor restrictions may limit initial offerings to qualified buyers or accredited investors under Regulation D exemptions before broader retail availability.

Business Model and Scalability: Path to Profitability

Ondo’s success depends on achieving meaningful scale to absorb regulatory, technological, and custody costs.

Management fees similar to ETF expense ratios (generally 0.10%-0.50% annually) provide recurring revenue streams on managed assets that grow with product adoption. Transaction fees on creation and redemption can generate revenue, though competitive pressures and adoption incentives may minimize these costs.

Spread capture between bid and ask for tokenized equities, if Ondo provides market-making services, creates trading revenue. Custodian fees charged by underlying custodians reduce net margins, requiring sufficient scale to absorb fixed costs while maintaining competitive pricing.

Technology licensing to other institutions seeking similar tokenization capabilities can provide additional revenue streams beyond proprietary products. Economics are highly sensitive to achieving significant transaction volume and a growing user base.

Institutional Adoption Potential: Key to Long-Term Success

Greater success is likely to depend on institutional adoption rather than retail, given compliance requirements and use case alignment.

Hedge funds and proprietary trading firms can leverage 24/7 trading for ongoing risk management and algorithmic strategies. International asset managers can access U.S. equities during local trading hours, improving operational efficiency. Crypto funds and corporate treasuries managing digital assets gain easier methods to diversify into traditional equities without complex fiat conversions.

Family offices and high-net-worth individuals may value programmable features and DeFi integration for advanced wealth management strategies. Pension funds and insurance companies face regulatory and operational hurdles that may hinder short-term adoption, despite potential efficiency benefits in settlement.

Market Challenges and Operational Risks

Various risks could hinder successful launch or limit post-launch adoption.

Regulatory rejection or delays are primary risks—SEC could deny approval, request modifications that delay launch, or approve with restrictions reducing product viability. Custodian and partner risks exist if custodians face financial difficulties, operational failures, or fraud despite qualification and insurance protections.

Smart contract vulnerabilities could enable theft or loss of tokenized equity through code exploits despite audits and best security practices. Market acceptance remains uncertain as investors may prefer familiar traditional brokers over novel blockchain alternatives, especially given the learning curve.

Liquidity challenges could lead to wide spreads and poor execution quality if insufficient market participants provide liquidity for tokenized stocks. Oracle and pricing risks during trading hours could create manipulation opportunities or disconnection from fair value.

DeFi Integration and Diverse Use Cases

Tokenized equities open unique opportunities for integration with decentralized finance ecosystems.

Assets can serve as collateral in lending protocols, provide liquidity in automated market makers, and be composited with other DeFi primitives to create innovative financial products. Cost reduction for fractionalization becomes economically viable due to minimal transaction costs, enabling dollar-based purchases rather than full shares—especially important for high-priced stocks like Berkshire Hathaway Class A or Amazon.

Programmatic trading and algorithmic strategies benefit from API access to blockchain and 24/7 markets, enabling continuous automated execution. Traditional retail investors may lack strong incentives to adopt tokenized alternatives unless tangible value beyond technological novelty emerges.

Competitive Landscape: Established Players and New Entrants

Ondo enters an increasingly crowded tokenized equity space with established players and newcomers pursuing similar real-world asset tokenization strategies.

Some platforms offer tokenized stocks on blockchain, including leading technology firms and indices, operating from jurisdictions with supportive regulatory environments. Decentralized finance protocols offer synthetic equity exposure via derivatives rather than custody-based tokens, presenting different risk-reward and regulatory profiles.

Traditional financial initiatives from large asset managers currently focus on money market and fixed income funds rather than equities. Technology infrastructure providers offer platforms for securities tokenization and collaborate with firms to tokenize private markets that could evolve into public equities. SEC-registered securities token trading platforms offer tokenized securities despite limited product scope and trading volume.

Ondo’s advantages include a mature RWA platform, robust Solana infrastructure, institutional relationships from fixed income products, and regulatory navigation experience, while competition comes from native crypto providers and traditional finance entities.

Global Regulatory Considerations and Market Fragmentation

While focusing on U.S. securities, Ondo must navigate international regulations as blockchain enables global access to tokenized assets.

Cross-border securities regulations restrict U.S. securities offerings to foreign investors without compliance with local laws, creating jurisdictional complexity. Geofencing and access controls may limit who can access tokenized equities based on verified location, though blockchain’s pseudo-anonymous nature complicates enforcement.

International custodians and settlement for non-U.S. investors pose operational challenges around currency exchanges, tax withholding, and regulatory reporting. Diverse tokenization approaches in jurisdictions like Switzerland, Singapore, and UAE may create fragmented markets with limited cross-border interoperability.

The Road Ahead: Critical Success Factors

The launch of Ondo’s tokenized equity platform will be tested by its ability to:

1. Secure regulatory approval without substantial exemptions that significantly reduce product appeal

2. Develop sufficient liquidity so that the tokenized market becomes a viable alternative to traditional trading

3. Absorb custody and compliance costs while maintaining competitive pricing that drives adoption

4. Identify and execute clear use cases that deliver tangible value beyond blockchain technology’s novelty

5. Build a robust technical infrastructure capable of handling complex corporate actions and risk management

Success will depend on whether sufficient liquidity develops in the tokenized markets to create a genuinely viable alternative to traditional trading, or if the product remains a niche offering for specific institutional use cases. Ondo’s move marks a pivotal moment in equity trading evolution and will provide concrete evidence of the long-term viability of blockchain-based securitization in traditional capital markets.