Franklin Templeton’s tokenized high yield bond ETF lands on Pendle as FLHYon

Ondo Finance has expanded the utility of its tokenized Franklin Templeton high-yield corporate bond ETF, FLHYon, by launching a dedicated market on the yield-trading protocol Pendle. This integration allows investors to trade the future income streams of the tokenized junk bond fund with a fixed maturity date set for 2026. FLHYon, which operates on the Ethereum blockchain, provides economic exposure to the underlying Franklin Templeton ETF through an offshore structure managed by Ondo Global Markets. As of October 2026, the tokenized asset reached a circulating supply of approximately 20,558 units with an on-chain value of roughly $497,000. The expansion follows a broader strategic partnership between Franklin Templeton and Ondo, which aims to bring five different ETFs onto the blockchain. Beyond Pendle, the token has also gained utility as collateral on the lending platform Morpho, supported by Chainlink price oracles. While this development enhances the financial engineering possibilities for RWA holders, the market remains relatively small and carries inherent risks including credit exposure, oracle reliance, and smart contract vulnerabilities. This move signifies a growing trend of layering decentralized finance protocols on top of institutional-grade tokenized securities to increase capital efficiency.