Mantle, operator of layer 2 Ethereum ecosystem Mantle Network, and Ondo Finance, provider of on-chain financial products for institutional investors, are launching USDY, the companies announced Tuesday.

The yield-generating token backed by real-world assets (RWA) aims to provide easier access and more liquidity within the Mantle ecosystem, according to a press release provided to Unchained Crypto.

Mantle has had a busy year between merging with BitDAO in May and unveiling the mainnet alpha of its Mantle Network in July.

The merger with BitDAO gave Mantle a strong governance framework and a whopping $2 billion treasury. The Mantle DAO approved seed liquidity for its new stablecoins, which included up to 60 million RWA-backed USD stablecoins.

$USDY is backed by short-term U.S. Treasuries and bank demand deposits, which provide the yield through accumulating token value. 

Mantle and Ondo Finance will also soon launch $mUSD, a rebasing wrapped version of $USDY designed to maintain a peg to $1 that will distribute interest through new tokens.

“RWA is expected to play a key role in helping bring sustainable yield into Mantle’s broader DeFi ecosystem, and $USDY and $mUSD are crucial pieces of the puzzle,” said Jordi Alexander, chief alchemist of Mantle, in the press release. “We are thrilled to work with Ondo Finance to build a highly liquid and easily accessible ecosystem for $USDY and $mUSD to be used and traded just like any stablecoin, but with the added benefit of tapping into real-world U.S. Treasury yield right from the crypto wallet.”

The new tokens can be acquired on Mantle’s decentralized exchanges or minted and bridged through Ondo Finance. The tokens can be used as collateral in lending protocols, as yield-bearing stablecoins in automatic market makers (AMMs) and for payments and settlements within the Mantle ecosystem.