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 Token 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 incoming and outgoing wire / money transmission fee on any investments or 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 $12 per incoming international wire and $30 per wire outgoing international wire but may change at any time. For investments or 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.
These pages are provided solely to facilitate your understanding of certain key features and terms of USDY and its issuer, and is qualified in all respects by the Tokenized Credit and Security Agreement, your Subscription Agreement, the Borrowing and Lending Memorandum, and the Limited Liability Company Agreement of Ondo USDY LLC.
For the purposes of these pages, the capitalized term “Token” shall refer to the transferrable USDY token.
Neither these pages, nor any related links or discussions, nor any portion hereof or thereof, constitutes any offer to sell, or any solicitation of an offer to buy, any securities, including but not limited to USDY Tokens.
Neither these pages, nor any related links or discussions, nor any portion hereof of thereof, constitutes any representation, warranty or covenant on the part of Ondo Finance Inc., Ondo USDY LLC or any other person.
These pages and their links contain, and officers, agents or representatives of Ondo Finance Inc. or Ondo USDY LLC may from time to time make, "forward-looking statements". Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on current beliefs, expectations and assumptions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of the control of Ondo Finance Inc., Ondo USDY LLC and their respective officers, agents and representatives. Actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements.
Acquiring USDY Tokens is speculative and involves substantial risks. There can be no assurances that a USDY Token holder will not incur losses, including total loss of their investment in USDY Tokens.
The USDY Tokens are not offered OR SOLD, and will not be offered OR SOLD, in the United States or to US persons. In addition, the USDY Tokens have not been registered under the Securities Act of 1933, as amended (the “Act”) or the securities laws of any other jurisdiction, and may not be offered, sold or otherwise transferred in the United States or to US persons unless the securities are registered under the Act, or an exemption from the registration requirements of the Act is available. Additional limitations on transfer also apply.