$USDY Token Breaks Away from Traditional Stablecoin Model

Ondo Finance's USDY token is not a stablecoin like Tether's USDT or Circle's USDC. Instead, it's a tokenized note backed by short-term US Treasuries and bank deposits, with a collateralization ratio of 105.79% as of late August 2026.

The token's price is designed to rise over time as it accrues yield, unlike stablecoins that target a fixed $1.00 peg. By the end of August 2026, USDY had traded well above its launch price of $1.00, reflecting more than two years of accrued yield.

The token's yield is not fixed and reflects the weighted average return of the Treasury and deposit portfolio, after fees. As of August 2026, the seven-day annualized yield was near 3.49%, down from levels above 4.5% earlier in the year as short-term Treasury yields eased.