Tokenized stock platform Ondo: Spout plans to support stock token collateralized lending

TechFlow news, November 12: According to the Ondo Finance official blog, lending platform Spout Finance plans to support using Ondo stock and ETF tokens as collateral when it launches on Solana, allowing borrowers to borrow up to 50% of the collateral value in USDC. Spout does not charge borrowers interest.

Under the plan, Spout will redeem tokens for the underlying stocks through Alpaca's instant tokenization network and sell covered call options on the stocks, with option premiums net of fees used to pay lender returns. As the cost of interest-free borrowing, borrowers forgo gains above the option strike price; if the options are exercised, the related stocks will be sold at the strike price and repurchased at market price, which may reduce the tokens held by borrowers. When collateral value declines, borrowers must also maintain sufficient collateral; otherwise, it may be sold to repay the loan.

Source: TechFlow