Ondo puts three BlackRock strategies into onchain portfolio tokens

Ondo Finance launched three onchain portfolio tokens on Sept. 24, each built around a strategy developed by BlackRock for Ondo. The tokens package exposure to baskets of assets in a single instrument. Ondo’s launch announcement says allocation, rebalancing and fee logic are encoded in smart contracts.

The products are Ondo High Income Powered by BlackRock (BLKHIon), Ondo Diversified Growth Powered by BlackRock (BLKDIGon) and Ondo High Growth Powered by BlackRock (BLKGRWon). The Block reported that they are available to eligible investors outside the United States in permitted jurisdictions. Investors mint or redeem a single token instead of handling the portfolio’s individual positions.

What does each token represent?

Each token represents a portfolio strategy, not a single underlying security. The income strategy targets global income; the other two use diversified growth and high-growth allocation strategies. Ondo says portfolio assets and target weights are set at inception, then rebalanced on a fixed schedule. It has not specified the schedule or published the portfolios’ asset weights in its announcement.

The underlying positions are Ondo Stocks, which Ondo describes as tokenized equities and exchange-traded funds backed by securities sourced from market liquidity. The portfolio tokens are therefore designed to provide exposure to weighted baskets through one token. Ondo says holdings, weights and rebalances are visible onchain; the tokens can also be transferred peer-to-peer and used across decentralized finance protocols.

Who sets the strategy and runs the portfolios?

BlackRock developed the model portfolio strategies for Ondo, but it does not manage the onchain portfolios. The Block’s report says BlackRock’s role is limited to providing nondiscretionary model strategies based on specifications supplied by Ondo. Ondo determines how to implement each model and says its programmatic rules handle allocations, rebalancing and fees.

Ondo Global Markets issues the tokens, while Ondo Finance handles tokenization, according to The Block. The announcement does not identify a blockchain network for the new products or describe the contract functions used to mint and redeem them. It says the portfolios are freely transferable and that their rebalances can be inspected onchain, but does not give a launch schedule for additional portfolios.