Ondo shifts from layer-1 blockchain plan to offchain execution network

Ondo Finance, a platform focused on real-world asset tokenization, has shifted its strategy from developing a dedicated institution-focused layer-1 blockchain, announced in early 2025, to launching an offchain execution network called Ondo Network. This network operates trades off public blockchains and is already in use via Ondo Perps, the company's perpetual futures trading platform. Unlike traditional blockchains which rely on distributed node networks, Ondo Network runs trading software within a single protected computing environment known as enclaves or Trusted Execution Environments (TEEs). A group of operators oversees the software integrity, holding parts of the digital keys necessary to authorize asset transfers.

Ondo emphasized that while the system does not function as a blockchain in the traditional sense, transaction transfers are still ultimately recorded on public blockchains, though Ondo did not disclose the identities or the number of these operators. The company presented this offchain execution network as an evolution of its Ondo Chain, initially aimed at tokenizing traditional financial assets onchain. Despite the move away from a full blockchain solution, Ondo has indicated possible future enhancements such as adding more operators, increasing the extent of public blockchain recording, and implementing a token-based security mechanism for participants, without providing a specific timeline.

In early 2025, Ondo Chain reached the testnet stage, marking a milestone when JPMorgan’s Kinexys platform and Chainlink conducted the first transaction involving a tokenized US Treasury settlement. The shift from the layer-1 blockchain concept towards an offchain execution model reflects Ondo Finance’s adaptation in managing institutional asset tokenization and trading. The company aligns its approach with maintaining accuracy and transparency, as noted by Cointelegraph’s commitment to independent journalism and factual reporting.