Ondo Token Bridge

Introduction

We have partnered with LayerZero, the leading interoperability protocol that has successfully transmitted over 135 million messages and facilitated the exchange of more than $60 billion in value. The integration of LayerZero V2 alongside our enhanced security measures delivers premier security for our users, all while maintaining a seamless user experience.

Every aspect of this bridge is developed with security in mind:

• We’ve carefully selected a set of off-chain verifiers (a.k.a. DVNs), which guarantee strong security through independent actors (minimizing collusion risk) and disparate verification mechanisms (ensuring that even if a bug were to exist in one verifier, that verifier’s actions are mutually exclusive to the others and cannot compromise the overall system).
• We have worked with LayerZero to develop a custom rate limiting implementation and emergency pause feature.
• We have worked closely with a leading Web3 security firm and LayerZero Labs to vet all aspects of the configuration.

LayerZero Mechanism

At a high level, the LayerZero protocol is a mechanism to securely transmit messages across blockchains.

Decentralized Verification Networks (DVNs) monitor for bridging events from source blockchains, validate these transactions, then post attestations to the destination chains. An executor submits a payload to the destination chain; if the executor's payload and the DVN attestations match, the USDY tokens are minted to the recipient.

Ondo has employed LayerZero’s OFT (Omnichain Fungible Token) standard to allow users to burn and mint native USDY on all supported chains.

DVN Selections

Our implementation of the OFT Token Bridge leverages the following independent verification mechanisms as DVNs to provide multiple redundant levels of security:

• Polyhedra’s ZKBridge DVN
• Axelar DVN
• LayerZero Labs DVN

Polyhedra (opens in a new tab) offers mathematical proof of bridge events via zero-knowledge proofs, while Axelar (opens in a new tab) is a battle tested Proof of Stake blockchain purposed for General Message Passing (GMP). Axelar has securely transmitted over 2 billion messages, representing more than $9 billion in volume.

We plan to add a custom Ondo DVN in the near future, further strengthening the security of the bridge.

Chain Availability

We currently support transfers between Ethereum, Mantle, and Arbitrum. Stay tuned for more chain integrations coming soon.

Rate Limiting

The USDY bridge implementation contains a built-in rate limit feature in the smart contracts, enforcing both an outbound and an inbound limit. The capacity of the rate limiter refills at a linear rate, and blockchain transactions attempting to exceed the rate limit capacity will revert. This security measure enforces an upper bound on the amount that can be transferred per-pathway over a (configurable) 24 hour period.

The outbound limit is 450,000 USDY per pathway per day. The inbound limit is 500,000 USDY per pathway per day.

Note: DVN and rate limit configurations are subject to change by Ondo Finance with the ever-evolving bridging landscape.

FAQ

Can I specify a different destination address for my transfer?

Yes - Ondo’s bridge webpage allows the user to specify a different destination address. Click the Address box under the destination chain to specify the destination address.

Are there any fees associated with transferring tokens?

Transferring tokens comes at no fee on the USDY amount — you’ll receive the same amount of tokens on the destination chain as you’re sending from the source chain.

However, there are two types of fees paid in the native token of the source chain (such as ETH):

1. Standard gas fees: You will pay for the normal gas cost of to publish the transaction to the source chain, just like you would for any other transaction. This is handled automatically by your wallet.
2. Cross-chain gas fees: Both LayerZero and the DVNs will receive gas fees for publishing your transaction to the destination chain. This is shown under cross-chain gas fees.
   
   

How long do transfers take?

Transactions take between 15 and 70 minutes to complete depending on the selected chain path. The tokens will automatically be sent to the recipient wallet on the destination chain.

In cases of network congestion, this may be delayed up to 24 hours.

Are there any bridging best practices?

When bridging tokens across blockchains, it's highly recommended to perform a small test transfer before committing to a larger transaction. This allows you to verify that the bridge is functioning correctly, confirm that you're using the right address and blockchain network, and ensure any fees or delays are clearly understood. Test transfers reduce the risk of potential loss or issues caused by misconfiguration or unforeseen problems during cross-chain transfers.

My transaction is pending or has failed. What should I do?

In most cases, you can resolve this on your own.

Check Axelar

First, check Axelar to see if the Axelar DVN transaction is still pending.

1. Check the status on the Axelar explorer. Paste your source chain transaction hash into the search bar at https://axelarscan.io/ (opens in a new tab).

2. Check the status. The transaction may indicate an error and require manual action.

   
   
   

3. Execute the transaction by clicking Connect and paying the gas for the transaction.

4. Your transfer should now resume. Return to the bridge page at ondo.finance to monitor the transfer.

   
   

   Check LayerZero Scan

If the issue was not with the Axelar DVN, you may need to take a similar action at LayerZero Scan.

1. Check the status on the LayerZero explorer. Paste your source chain transaction hash into the search bar at https://layerzeroscan.com (opens in a new tab).

2. On the right-hand side of the page, there may be an Execute button. Click this, and connect your wallet.

   
   
   

3. In the provided window, click Commit and execute.

   
   
   

If your are unable to resolve the issue and the transfer has not processed after 24 hours, please contact us at support@ondo.finance.