Ondo
Ondo Stocks tokens track public securities while private notes represent unsecured debt
Ondo offers stock tokens that track public securities and private-company notes that create unsecured claims against a separate issuer. Each stock token has backing in the underlying security, including any cash in transit. Its return reflects market movements and reinvested dividends after applicable withholding taxes. A private-company note links its payout to a reference company's common shares at a Qualifying Liquidity Event. The noteholder owns the issuer's debt, and the reference company supplies no collateral. Both instruments can move between eligible holders, although their redemption rights work differently. Holding a token in a wallet doesn't give its owner direct title to company shares.
Updated -Stock-token returns and changing share exposure
An Ondo Stocks token tracks the economics of its underlying security, so its reference price can diverge from one share's market price as income is reinvested. This is a total return tracker: the token combines price changes with reinvestment of the underlying asset's income, after applicable withholding. The number of shares economically represented by one token can therefore increase over time.
Dividend reinvestment
The issuer reinvests net dividends into the underlying asset. That raises the exposure attributable to each token instead of creating a separate cash-dividend payment to the holder. A token price above the quoted share price can reflect accumulated reinvestment; a direct one-token-to-one-share comparison can misstate the position.
Wallet balances on Solana and BNB Chain
Adjusted display units
Supported wallets and explorers on Solana and BNB Chain use a display multiplier. It expresses changes in shares per token through the displayed balance, with a matching adjustment to the displayed unit price.
Unadjusted token units
Unadjusted interfaces reflect changes through the per-token price, as on Ethereum. Both presentations preserve the actual onchain balance and economic exposure.
Stock backing and the holder's legal claim
Ondo Global Markets (BVI) Limited issues the stock tokens, while regulated U.S. custodial broker-dealers hold their backing assets. The issuer is a special purpose vehicle (SPV), a separate legal entity with its own governance and accounts. The stock tokens have full backing in their underlying assets, together with any cash in transit. The issuer must also maintain additional collateral above full backing. Each stock token is a structured note, giving its holder a debt claim against the issuer under the token terms. Tokenholders don't receive direct title, statutory information rights, or shareholder voting rights from the underlying securities' issuer. Ondo's April 28, 2026 announcement describes a Broadridge integration for submitting voting preferences to the token issuer. Broadridge's aggregation of these preferences requires Ondo Stocks' consent.
Ankura Trust Company acts as verification agent and security agent. It reviews holdings and holds a first-priority security interest in the collateral, with enforcement powers under the governing agreements. Specified issuer defaults can permit collateral liquidation and distribution of proceeds to tokenholders. That route relies on contractual conditions and the security agent's action. Keeping the token in a personal wallet doesn't move the underlying shares out of broker custody.
Who can buy directly from the stock-token issuer?
Eligible non-U.S. institutions and individuals in supported jurisdictions can buy directly after completing the required identity checks and receiving account approval. The platform uses KYC for individuals and KYB for entities; these mean know your customer and know your business. Persona handles the verification process, and Ondo reviews linked wallets. Some products also require signed agreements before account provisioning finishes. Buying an existing token on a secondary market doesn't itself complete that onboarding process. Geographic restrictions and the applicable investor requirements remain relevant even when a wallet can technically receive the token.
Private-company notes and unsecured issuer debt
PM Issuer Co (BVI) Limited issues Ondo Private Markets notes whose payout references the economic performance of a named private company's common shares. One note references one common share, without granting ownership of that share. The notes are unsecured obligations of PM Issuer Co (BVI) Limited. The reference company doesn't owe noteholders payment. Its shares, a reserve, or a hedge don't secure the note. This structure leaves the holder exposed to the note issuer's ability to meet its obligation.
ERC-20 transferability records movement of the note token; it doesn't transfer a private-company share or satisfy the issuer's eventual claim requirements.
The private note's path to settlement
A qualifying event turns the note's contractual reference into a fixed settlement price, subject to that event's pricing provisions. Ownership at the event's record time identifies who may claim payment. The process connects the transferable token to the issuer's debt obligation, with eligibility requirements remaining in force through the claim stage.
| Stage | Token and settlement mechanics | Holder's position | Issuer's role |
|---|---|---|---|
| Issuance | An Ethereum Mainnet ERC-20 token represents the note. | An eligible holder owns an unsecured debt claim. | PM Issuer Co (BVI) Limited issues the obligation. |
| Qualifying Liquidity Event | The earliest qualifying event fixes the note price under its terms. | Record-time ownership identifies the potential claimant. | The issuer applies the relevant contractual pricing provisions. |
| Claim | The record-time holder proves wallet control and completes required checks within the claim window. | The holder accepts the required terms and claim agreement. | The issuer checks identity, non-U.S. status, and sanctions eligibility. |
| Settlement | Payment uses the fixed note price and note count, less applicable deductions. | An eligible claimant receives payment under the Token Terms. | The issuer settles its debt without delivering reference-company shares. |
When can a private note pay out after an IPO?
An IPO-linked payout requires six months of share trading on a relevant national exchange, followed by the issuer's claim process for eligible holders. An initial public offering (IPO) starts that six-month period when the reference company's shares begin trading publicly. The note's IPO-linked price uses the trailing 10-day volume-weighted average share price leading up to that six-month date. A volume-weighted average weights trades by their volume. The initial IPO price therefore doesn't determine the redemption amount.
The issuer then has up to 90 days to open the claim window. Eligible holders must submit their claims within one year of the Qualifying Liquidity Event. That calendar allows time for claim administration after the pricing date; it doesn't establish a fixed payment day for every holder.
Acquisitions, majority-share sales, winddowns, and term expiry invoke their own qualifying-event and pricing provisions.
The ten-year term and interim cash flows
Private-company notes run for ten years from initial issuance, with no interest or dividend payments during the term. If no earlier qualifying event occurs, expiry invokes the note's contractual redemption provisions. Those provisions govern the pricing treatment at the end of the term. Future offerings may set different durations and terms.
Can a private note's trading price predict its payout?
A private note's trading price reflects buyer and seller demand, while its eventual payout follows the contract's event-pricing provisions. The trading price can differ from both a private-company valuation and the eventual redemption price. It also reflects an unsecured claim whose payment may remain years away. A stock token has a different relationship with market prices: its backing tracks an observable underlying security and reinvested income. That supports a pricing relationship, although its token price needn't equal one share's price.
Continuous trading availability doesn't establish liquidity. Private notes can't be redeemed before a Qualifying Liquidity Event. A noteholder seeking an early sale still needs a willing buyer at an acceptable price.
Wallet possession and retained issuer powers
Private-note holders can transfer tokens only within the instrument's eligibility restrictions, and the issuer retains administrative powers over those tokens. It can pause transfers or claims and freeze or claw back tokens linked to sanctioned or prohibited wallets. Personal wallet custody describes who controls the wallet keys; it doesn't remove the issuer's controls or turn its debt into collateral.
USDY records a separate yield-bearing note arrangement, and OUSG represents a limited partnership interest. Those Treasury-related structures don't provide collateral for these private notes; a future note would need its own backing provisions.
Ondo FAQ
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How does dividend withholding affect a stock token's return?
- U.S. company dividends paid to the British Virgin Islands stock-token issuer generally face 30% withholding before reinvestment. That percentage applies to the dividend, not the token balance or its capital gain. Fixed-income exchange-traded fund (ETF) distributions may contain exempt portions, so their effective withholding rate can be lower. A holder's own tax obligations remain separate from withholding at the issuer level.
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On which networks can Ondo stock tokens and private notes be held?
- The stock platform supports Ethereum, BNB Chain, and Solana, with select tokens transferable to HyperEVM and Robinhood Chain. Private-company notes use the ERC-20 standard on Ethereum Mainnet. A stock token's native issuance and bridge availability are separate questions; support for a network in the stock platform doesn't establish private-note availability there.
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Can I redeem a stock token directly into USDC?
- Direct stock-token redemptions can return USDC when the platform's swapper has sufficient USDC liquidity. The base redemption asset is USDon. Users need swapper whitelisting, and the documented swapper requires direct smart-contract interaction because it has no user interface. Account eligibility and the asset's trading availability still apply.
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May private-company notes be transferred to a U.S. buyer?
- Private-company notes cannot be transferred to U.S. persons or acquired by someone located in the United States. Other blocked jurisdictions and sanctions restrictions also apply. Eligibility concerns buying, holding, and receiving the notes, not only redemption. An otherwise eligible recipient must still complete the issuer's separate claim requirements before receiving a payout.
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In what currency does a private-note redemption settle?
- Each note's Token Terms specify the settlement currency. For a valid claim, payment equals the number of notes covered by that claim multiplied by the fixed event price, minus tax withholding and settlement fees. The issuer settles in that currency, and the claimant receives no shares in the reference company.
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Could the private-note issuer replace or migrate its tokens?
- The issuer can mint, burn, or migrate private-note tokens to correct errors or respond to an exploit. These administrative powers affect the note token and remain distinct from the reference company's business. Permissionless secondary trading doesn't remove the issuer's authority over the instrument.