Ondo Finance, which designs institutional-grade platforms, assets, and infrastructure to bring financial markets onchain, has launched a new type of fund which it described as the “SPY moment” for onchain finance.

In September this year Ondo announced that it was introducing Ondo Intelligent Portfolios, seven tokenized model portfolios for investors outside the U.S., which are each built into a single onchain token. BlackRock has designed the strategies for three portfolios.

John Hoffman, head of product portfolios at Ondo, told Markets Media: “My parallel from an ETF lens is that this is the SPY moment for onchain finance. We are opening up a whole new category.”

SPY, the SPDR S&P 500 ETF, is an exchange-traded fund tracking the performance of the S&P 500 Index and was first U.S.-listed ETF when it was introduced by State Street Investment Management (then State Street Global Advisors) in 1993. Since then the U.S. listed ETF market has grown to a record $16.4 trillion at the the end of August this year according to ETFGI, an independent ETF research and consultancy firm. Global ETF assets also surpassed $24 trillion for the first time at the end of August this year.

Hoffman has a background in ETFs as he spent 18 years at asset manager Invesco, including as head of the Americas, ETFs and index strategies. He was hired by digital asset fund manager Grayscale Investments in 2023 before joining Ondo Finance in May this year.

He continued that the ETF market began with SPY which simply tracked the S&P 500 index, but that innovation opened the door for ETFs across fixed income, currencies, commodities and even active strategies now being included in the ETF wrapper. Hoffman said: “In ETFs we have active, thematic, leveraged and inverse strategies across different asset classes, so we could see the same thing happening eventually with Ondo Intelligent Portfolios.”

In Ondo Intelligent Portfolios, BlackRock, or other managers in the future, define the portfolio allocation and Ondo determines how that model is implemented programmatically. Smart contracts execute the stratgey and rebalancing according to the product’s rules. Investors outside the U.S can buy each portfolio through a single token using stablecoins. The token can be used, for example, as collateral in an onchain lending protocol or as margin for onchain derivates, such as perpetual futures.

“Most of the world has never had access to professionally built portfolios and BlackRock,” added Hoffman. “Anybody with an internet connection and a wallet outside the United States can now access these capabilities.”

Currently, Ondo Intelligent Portfolios are allocated across products that have been tokenized by Ondo including equities, bonds and ETFs.

As Ondo tokenizes more assets, Intelligent Portfolios will have more asset options to choose from. The firm said: “As we move to more dynamic portfolios and bring additional asset types onchain – perps, spot crypto, options, futures, and more, each of those becomes something an Intelligent Portfolio can hold, allowing for more sophisticated portfolios tailored to clients’ exact needs.”

Ondo gave the example of a single global growth portfolio which could hold U.S. and international ETFs as its core, use leverage to bolster returns while using perpetual futures to hedge risk and a small memecoin allocation for upside optionality, all while using an options overlay on top to generate income, and a set of prediction market bets to manage global macro tail risk. The firm highlighted that today, that would mean juggling a crypto wallet, a prediction market account, a brokerage account, a derivatives account, and options desk across multiple jurisdictions; with Ondo Intelligent Portfolios it can all live in a single token.

“Launching Ondo Intelligent Portfolios is about assembling these assets into professionally curated portfolios that are delivered as a single onchain token,” said Hoffman. “I see a world where we would have hundreds of OIPs created with many of the world’s best asset allocators and money managers, offering investors access to precise diversified returns.”

When Hoffman joined the ETF market, assets were between $180bn and $200bn and there were conversations about why ETFs were needed as mutual funds worked really well. Today, the same conversations are happening around tokenized funds. Hoffman added: “This is a new technology that is going to create use cases that we cannot imagine.”

He used the analogy of the iPhone, which people did not imagine would be used to hail cabs and make seamless payments.

In a report Coindesk said that mutual funds and ETFs have bundled investments into single products for decades, but putting the portfolio itself onchain potentially gives it characteristics that traditional structures don’t have.

“Most of the tokenization boom so far has focused on individual assets: Treasury funds, private credit, stocks and ETFs,” added Coindesk. “The BlackRock-Ondo products point toward the next layer: combining those assets into investment strategies and putting the strategy itself onchain.”

Coindesk continued that tokenization could give asset managers another way to distribute model portfolios.

The Tokenization Insight newsletter said tokenizing a single fund digitizes a product while tokenizing the portfolio potentially digitizes the entire investment relationship.

“For Ondo, it is already one of the biggest onchain tokenization platforms with $3.9bn assets under management,” said the newsletter. “With this, the strategic position is becoming broader again: not simply tokenizing assets, but building the infrastructure through which traditional asset managers can package and distribute investment products to onchain investors globally.”

Vaults

Hoffman highlighted that Ondo Intelligent Portfolios are not vaults, another form of onchain funds that have been compared to ETFs.

S&P Global Ratings defines digital asset lending vaults as investment vehicles operating on a blockchain that pool investor deposits and deploy them according to defined strategies, working much like managed fixed income funds. These strategies can be fully automated via smart contracts or managed discretionarily by human managers and depositors receive tokens that represent their proportional claim on the vault’s assets and any accrued returns

S&P said in a report that total deposits in vaults reached $10bn in September 2026, from $1.5bn two years ago, . The report said: “While blockchain-based activity enables point-in-time transparency, strategy and risk disclosures for vaults have typically been limited.”

In October this year S&P launched its Vault Risk Assessment (VRA), to provide independent, forward-looking insights into the risks associated with digital asset lending vaults.

James Wiemken, head of global ratings services at S&P Global, said in a statement that digital asset vaults represent a significant evolution in onchain finance, offering new avenues for pooled investment and capital efficiency. He added: “However, the inherent complexities and varying disclosure standards in this nascent market create a clear need for a standardized, independent risk perspective. The VRA fills this critical gap, providing market participants with the deep insights necessary to navigate vault investments with greater clarity and confidence.”

Hoffman argued that Ondo Intelligent Portfolios borrow some of the beneficial attributes of vaults, such as using smart contracts to govern the allocation but provide better security as the underlying assets are held by a qualified custodian, Anchorage Digital.

“They are the hybrid of a vault and a traditional finance structure,” Hoffman added. “A layer of qualified custody was very important when we talked to institutional managers that will be managing more of these portfolios going forward.”