Economics & Fees

How quickly after investing do I start earning yield?

For investments made via USDC, you start earning interest as soon as we convert your USDC to USD and initiate the wire of those funds into our investment accounts. For investments made via USD bank wire, you start earning interest as soon as we receive the funds. Note that, in both cases, you may start earning interest even prior to receiving your Temporary Global Certificate.

How are the yields on the USDY determined?

On the first Business Day of each month, we set the Token yield rate for that month. This number is quoted on an annual-rate, APY basis. We then convert that to a daily rate since the interest compounds daily. As example, if the interest rate for June was set to be 4.00% APY the daily rate would be as follows:

(1 + .04)^1/365 - 1 = 0.01074598% (We round to 8 decimals places.)

How is the price of USDY determined?

The ‘face value' of the USDY Token price - what we call the Reference Token Price - on any future day is calculated based both upon the current Reference Token Price on the first Business Day of the month and the Token yield rate for that month. When such prices (as well as any other key values such as Token amounts and interest rates) are to be stored in our system, we first do the calculations and then round them to 8 decimal points before storing. For example, if the reference Token price on June 1 was $100.00000000 and the APY for June was 4.00000000%, the Token Reference Price on June 3 would be: $100.00000000*(1+[(1 + .04)^1/365 - 1])^2 = $100.02149311

What fees does USDY charge?

We charge no management or performance fees. When you invest in USDY, we earn interest on the bank deposits and Treasuries that we purchase. The interest rate we set monthly on USDY that you receive is generally set to be slightly lower than the interest the banks and Treasuries pay to us, and we earn the difference.

You will also be charged a redemption fee of 20bps on any redemptions.

Finally, you will be assessed an outgoing wire / money transmission fee on any redemptions under $100,000. These wire fees are charged by our service providers; we do not make money off such fees. As of this writing (2023-07-19), this is $30 per wire outgoing international wire but may change at any time. For redemptions at or over $100,000, we will cover those fees.

How is USDY taxed?

USDY is structured to not incur any US federal income tax obligations, including withholding tax and excise tax. Investors will need to consider their local tax laws to determine how to account for the return generated from USDY. In all cases, consult your tax advisor to help you answer specific questions regarding how tax laws apply to you and/or your business.

USDY Legal Disclaimer

USDY tokens have not been registered under the US Securities Act of 1933, as amended ("Act") or the securities or financial instrument laws of any other jurisdiction, and may not be offered or sold in the US or to US persons unless registered under the Act or an exemption from the registration requirements thereof is available. The Tokens are offered and sold in the European Economic Area and the United Kingdom solely to qualified investors, and in Switzerland solely to professional clients. Other jurisdiction-based prohibitions and restrictions apply. Ondo USDY LLC, the issuer of USDY, is not registered as an investment company under the US Investment Company Act of 1940, as amended, or as an Alternative Investment Fund or Undertaking for Collective Investment in Transferable Securities in the European Economic Area, or under the securities or financial instrument laws of any other jurisdiction. Nothing herein constitutes any offer to sell, or any solicitation of an offer to buy, USDY. Nothing herein constitutes investing advice. Acquiring USDY involves risks. A USDY holder may incur losses, including total loss of their purchase price. Past performance is not an indication of future results. Additional terms apply. See docs.ondo.finance/legal/terms-of-service, docs.ondo.finance/general-access-products/usdy and ondo.finance/usdy (opens in a new tab) for details.