Leveraged RWA

increase your exposure and assets to the one of the largest Real World Assets projects, Ondo Finance

What is Ondo Finance

Ondo Finance is a leading Real World Assets (RWA) protocol that offers multiple tokenized traditional financial products in the blockchain space and the third-largest platform bringing over $186M in TVL and over $1B worth of its newly-launched governance token trading. Their recent expansion to SUI became the first native dollar-denominated token, USDY, issuer on SUI, which is a big move for Sui's ecosystem and unlocks unlimited possibilities for Sui's builders and users.

What is USDY

USDY is a native yield-bearing stablecoin-alike assets who play 2 vital roles in Sui ecosystem, stableCoin and yield-bearing assets.

StableCoin

Unlike wrapped assets like USDC and USDT bridged from Ethereum to SUI, Ondo Finance's USDY is the first native stable token on SUI. The introduction of USDY offers an alternative option for users to stabilize the value of their holdings, acting as a reliable medium of exchange. This helps users prevent possible security issues from additional bridge system layers.

Yield-bearing assets

Different from pure native assets like USDC and USDT, USDY is backed by short-term US Treasuries and bank demand deposits. All the backed assets are over-collateralized to accumulate the yields through compounding over time. By simply holding USDY, users acquire passive fees without additional actions.

Leveraged RWA Vault

Given the features of stablecoin and a yield-bearing token. Strater introduced the Leveraged RWA vault to help USDY advance Sui ecosystem further, enhancing fast-moving Defi projects on Sui.

Currently, there is only Bucket protocol supporting USDY as collateral, more protocol supported vault will be released in the future. By leveraging low-required collateralization and the stability of CDP, BUCK, users can easily achieve 8x leverage exposure to USDY with low-gas fee consumption in one click. Since both BUCK and USDY are steadily pegged to $1, there are no additional worries about being liquidated due to market volatilities.

Bucket Scenario (Stablecoin)

Consider a user with an initial position of 10 USDC aiming for 8x Leverage.

• User provides 10 USDC.

• Flash loans of USDC are utilized to buy an additional 70 USDY.

• Swap total 80 USDC for 80 USDY

• Deposits the USDY and borrows BUCK.

• BUCK is used to purchase USDC, which repays the flash loan.

In summary, the user would hold 80 USDY as Assets, 70 BUCK as Debt, and 10 USDY as Equity. (Note that Assets = Debt + Equity.)