Same Asset, Different Tokens: A Comparative Analysis of Ondo’s OUSG, Mountain Protocol’s USDM, and BlackRock’s BUIDL

Introduction

The recent accomplishment of BlackRock’s BUIDL fund, surpassing $500 million in assets under management within just four months of its launch, serves as a testament to the accelerating adoption of digital assets within the financial industry. This achievement underscores the robust growth and confidence in tokenized assets and highlights the trend of other notable tokens, such as USDM and OUSG, reallocating their assets to BUIDL due to its compelling features and strategic advantages. Notably, OUSG by Ondo Finance contributes to 40% of the assets under management of BUIDL, illustrating the substantial impact and trust in the BUIDL fund. Moreover, integration of the BUIDL token as collateral by leading institutional brokers like FalconX and Hidden Road is further enhancing its utility and accelerating its adoption.

Amidst this dynamic backdrop, three tokens – BUIDL, USDM, and OUSG – stand out, each tailored to distinct market demands. Notably, both USDM and OUSG offer exposure to BUIDL, underscoring the importance of comparing these tokens. This trend also reflects a broader market phenomenon: the increasing tokenization of identical underlying assets by multiple providers, each operating under diverse jurisdictions with differing technological frameworks, legal terms, and ownership rights. As tokenization fundamentally changes all major product features, it becomes evident that investors must shift a significant portion of their due diligence and risk management to the token level, rather than focusing exclusively on the underlying assets.

In this regard, the article aims to compare the BUIDL, USDM, and OUSG tokens by examining their operational strategies, market positioning, and regulatory compliance. The goal is to exemplify their unique strengths and identify the potential challenges investors may face as part of their risk management processes. Additionally, it will analyze the product structures, associated investor rights, and conditions attached to each token. By exploring these aspects, stake- and shareholders will gain the necessary insights to navigate the complexities of the digital finance landscape and make well-informed investment decisions.

Comparative Analysis of BUIDL, USDM, and OUSG Tokens

BlackRock USD Institutional Digital Liquidity Fund (BUIDL) Token:

BUIDL, issued by BlackRock and tokenized through Securitize, is structured as an ERC-20 token operating on the Ethereum network. Based in the British Virgin Islands, BUIDL primarily invests in low-risk, short-term US Treasury securities, aiming to offer security and liquidity to its investors. A significant feature of BUIDL is its USDC liquidity facility, which is managed through smart contracts, facilitating immediate token exchanges. This feature significantly enhances liquidity and focuses on offering an efficient means of managing digital asset investments.

Ondo Short-Term US Government Bond Fund (OUSG) Token:

OUSG, offered by Ondo Finance, provides liquid exposure to short-term US Treasuries with 24/7 tokenized subscriptions and redemptions. Operating as an ERC-20 token on Ethereum, Polygon, and Solana, OUSG focuses on low-risk investments in US Treasury bills. The majority of its portfolio is invested in BlackRock’s BUIDL fund, with additional allocations in FedFund, bank deposits, and USDC for liquidity. Key features include instant minting and redemption, low minimum investment amounts, and two versions of the token: accumulating (OUSG) and rebasing (rOUSG). The USDC liquidity facility offered with BUIDL further enhances immediate liquidity, making OUSG a flexible and efficient investment option.

Mountain Protocol USD (USDM) Token:

USDM, offered by Bermuda-based Mountain Protocol Limited, is a yield-bearing stablecoin initially launched on the Ethereum network and expanded operations to Polygon, Arbitrum, Optimism, and Base. USDM is a rebasing ERC-20 token pegged 1:1 to the US dollar. Due to its rebasing mechanism, which adjusts supply based on yields from underlying assets, USDM can trade above $1.00, reflecting accrued interest rather than a fixed price peg. It is backed by low-risk assets, including US Treasury bills, notes, obligations guaranteed by the U.S. Treasury, reverse repurchase agreements with the Federal Reserve, and cash. USDM accrues daily rewards through a manual adjustment of the rewardMultiplier and is also available as a non-rebasing token (wUSDM) for easier integration with DeFi protocols.

In evaluating investment options, it is essential to consider both the strengths and challenges of each token to make informed investment decisions. The BUIDL token, with its daily dividend accrual and clear ownership rights, offers attractive features, but its high minimum investment requirement limits access for many investors. Similarly, OUSG’s strong market presence and robust technical infrastructure are compelling, yet the absence of direct claims to underlying assets may pose concerns for some investors. USDM’s rebasing token structure offers attractive returns; however, its limited availability to non-US investors and the potential centralization risk from issuer-managed custody services require careful consideration.

Whether you’re an investor looking to make informed decisions or an issuer aiming to enhance the credibility of your tokenized assets, having access to reliable data and comprehensive analysis is key. 

At Particula, we provide next-generation ratings and detailed reports that help financial leaders mitigate risks, streamline due diligence, and empower token issuers and exchanges to build more trust and transparency with their stakeholders. 

For more information, contact us at info@particula.io.