Ondo Finance has launched an in-kind conversion feature on Ethereum and BNB Chain, allowing approved institutions to directly convert existing stocks and ETFs into tokenized equivalents via Alpaca's Instant Tokenization Network. This new mechanism eliminates the need for separate cash funding, reducing capital burdens and financing costs for market makers. Ondo Finance, which ranks second in the tokenization market with $3.63 billion in assets, expects the feature to enhance secondary market liquidity and tighten spreads.
In-kind share conversion feature
- ▪Ondo Finance's in-kind conversion feature allows institutions to use existing shareholdings instead of separate cash to mint tokenized assets, reducing additional capital requirements and financing costs
- ▪Ondo Stocks' in-kind conversion process is currently supported on the Ethereum and BNB Chain blockchains
- ▪Ondo Finance introduced an in-kind conversion feature allowing approved institutions to directly convert existing stocks and exchange-traded funds into tokenized equivalents or redeem them back for underlying shares.
Alpaca Instant Tokenization Network integration
- ▪Ondo Finance's share-based minting and redemption system operates through Ondo Stocks' integration with Alpaca's Instant Tokenization Network
- ▪Under Ondo Stocks' integration with Alpaca's Instant Tokenization Network, shares are transferred from an institution's Alpaca account to Ondo's Alpaca account via internal book transfer to mint corresponding Ondo Stocks tokens
Institutional approval requirements
- ▪Alpaca handles the institutional approval process for its Instant Tokenization Network service on a case-by-case basis
- ▪Access to Ondo Finance's in-kind conversion feature, launched via Alpaca's Instant Tokenization Network, is restricted to institutional clients that maintain active, approved accounts with both Alpaca and Ondo Finance
Market liquidity improvements
- ▪Ondo Finance's new in-kind conversion system is designed to help market makers replace token inventory, manage positions, and react to demand across different trading venues without setting aside extra cash
- ▪Ondo Finance stated that its in-kind conversion feature could improve secondary market liquidity, support tighter spreads, and deepen markets for Ondo Stocks
Ondo tokenized asset platform position
- ▪Ondo Finance's SEC-registered broker-dealer subsidiary, Oasis Pro Markets, received SEC and FINRA authorization in July 2026 to offer tokenized equities and funds to U.S. investors.
- ▪Ondo Finance ranks as the second-largest tokenization platform by onchain value, with approximately $3.63 billion in distributed assets across 441 products, according to RWA.xyz data.
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