Ondo Finance: The Rising Star in the RWA Field

After experiencing a downturn in the crypto market, the narrative of real-world assets (RWA) led by MakerDAO is gradually emerging. The market has developed a strong interest in low-risk, stable-yield assets such as U.S. Treasury bonds. Against this backdrop, Ondo Finance has emerged as a leader in the RWA space.

Recently, the Ondo Foundation announced the unlocking of ONDO token circulation, and subsequently, a well-known trading platform will include Ondo Finance(ONDO) in its listing plan. This decision is expected to bring more vitality and liquidity to the Ondo Finance ecosystem.

Ondo Finance Overview

Ondo Finance is a protocol focused on RWA tokenized investments. In January 2023, the project launched the Ondo v2 version of the tokenized US Treasury fund, aiming to provide institutional-grade investment opportunities for a wide range of investors. Ondo brings low-risk, stable-yield products such as US Treasury bonds and money market funds to the blockchain, offering on-chain investors a new choice beyond stablecoins.

According to a certain data platform, the total market value of RWA US Treasury bonds has surged from an early $110 million to $863 million. Among them, Ondo has reached a market size of $125 million in this field, ranking third in the market, only behind two other well-known projects.

Main Products of Ondo Finance

Ondo has launched multiple products through tokenized funds:

1. Tokenized US Treasuries ($OUSG)
2. $OMMF Tokenized Money Market Fund
3. $USDY Yielding Stablecoin

These products allow stablecoin holders to invest in bonds and U.S. Treasury securities, and investors will receive a tokenized fund equity certificate. Ondo charges an annual management fee of 0.15%.

$USDY interest-earning stablecoin

$USDY is a dollar interest product aimed at non-U.S. residents and institutions, with underlying assets in short-term U.S. Treasury bonds and bank demand deposits. Investors must participate after KYC and can earn U.S. Treasury bond returns while maintaining a dollar peg. Currently, the total locked value (TVL) has reached $65.37 million.

$OUSG Tokenized US Treasury Fund

$OUSG is a tokenized US Treasury fund aimed at global institutional users, with the underlying asset being a short-term Treasury bond ETF from a well-known asset management company. Investors also need to go through KYC to participate, and the current TVL has reached $114 million.

$OMMF Tokenized Money Market Fund

$OMMF is a currency market fund pegged to the US dollar, with relatively low risk. This could be a SEC compliant currency market fund that is tokenized based on a rebase model.

Flux Finance: A Permissionless Investment Solution

To address the KYC access issues for some products, the Ondo team developed the Flux Finance lending protocol based on a well-known DeFi protocol. This allows permissionless DeFi users to indirectly participate in Ondo's ecosystem.

As of January 18, Ondo's TVL is $179 million, with Flux Finance's TVL reaching $24.32 million and the borrowing amount reaching $14.11 million.

The Development History of Ondo Finance

Ondo was founded in 2021 by two former investment banking employees. The team members have extensive backgrounds in finance and blockchain.

The project has completed seed and Series A financing rounds, receiving support from several well-known investment institutions. In May 2022, Ondo completed an ICO fundraising of over $10 million through a certain platform.

Token Economics

The total supply of ONDO tokens is 10 billion, with an initial circulation of approximately 14.3%. Over 85% of the tokens will be locked and gradually released over the next 5 years.

The token distribution is as follows:

• ICO Investors: 2%
• Ecological Incentives: 52.1%
• Protocol Development: 33%
• Private investors: 12.9%

Summary

Ondo Finance has established a significant position in the RWA US Treasury market, supported by its team's professional background and top-tier capital. The project's compliance and audit processes are relatively sound, and the product architecture is informed by the experiences of mature projects.

However, Ondo also faces fierce competition from its peers. Some emerging projects have achieved rapid growth in a short period of time. In addition, Ondo needs to expand its product lines further to enhance its competitiveness.

In the future, whether Ondo can create growth momentum through token incentives and explore new areas beyond US Treasury RWA will be a focal point worth paying attention to.