Spout Finance Integrates Ondo Stocks to Enable Interest-Free USDC Borrowing via Covered Calls
Spout Finance has announced the integration of Ondo Stocks as collateral on the Solana blockchain, allowing eligible non-U.S. investors to borrow USDC against tokenized stocks and ETFs with zero interest. Instead of traditional interest payments, Spout utilizes a covered call strategy where premiums from selling options on the underlying shares fund returns for lenders. The mechanism relies on Ondo's in-kind conversion process via Alpaca's Instant Tokenization Network (ITN), which allows Spout to redeem tokenized assets for actual underlying shares to write options against. While borrowers avoid interest, they must forfeit any capital gains that exceed the option's strike price and maintain sufficient collateral to prevent liquidation.
Topics: Collateralized Lending Covered Calls DeFi Solana Tokenization