Ondo Finance introduced three on-chain portfolio tokens on Sept. 24, applying investment strategies developed by BlackRock for the company. The tokens provide economic exposure to diversified portfolios, but they are securities issued by Ondo rather than ownership interests in BlackRock funds.
According to Ondo’s launch materials and product terms, only eligible non-US investors who complete the required onboarding process can redeem the tokens directly with the company.
The initial offerings are Ondo High Income (BLKHIon), Ondo Diversified Growth (BLKDIGon) and Ondo High Growth (BLKGRWon). BlackRock developed the underlying portfolio strategies for Ondo, while Ondo executes the allocations through tokenized assets and rebalances the portfolios according to a fixed schedule, the company said.
Each portfolio token provides exposure to a weighted mix that includes Ondo Stocks, which track stocks and exchange-traded funds. It does not grant holders a claim on the underlying funds or securities.
BlackRock Fund Advisors provides model allocations to Ondo, but it does not make investment decisions for the on-chain portfolios. Ondo is responsible for implementing the models and for managing, sponsoring and administering the products.
BlackRock does not manage the portfolios or owe advisory or fiduciary duties to token investors, and it is generally not required to update its models after delivering them. Ondo decides whether to apply any changes, meaning an on-chain portfolio may differ from the corresponding model.
Ondo’s FAQ says direct minting and redemption require an eligible person outside the US to complete identity and anti-money-laundering checks.
The process also screens for US-person status, restricted jurisdictions and prohibited persons. Ondo processes redemptions only for eligible holders who have completed onboarding.
A person may still receive or hold a portfolio token without completing that process because the tokens are transferable on-chain, subject to jurisdictional and other restrictions. Possession alone does not qualify the holder to redeem the token with Ondo.
The ability to move a token between wallets is therefore distinct from eligibility to redeem it with the issuer.
Ondo describes peer-to-peer transfers as available around the clock, including through supported third-party platforms. That capability does not guarantee that a buyer will be available at a desired price or that a holder can exit immediately.
Anyone unable to redeem directly would need to rely on a third party willing to accept the token, subject to that venue’s rules and prevailing market conditions.