Summary
Ondo Finance has become a key player in the tokenization of real-world assets (RWA), with the core mission of democratizing institutional-level financial products by combining the rigor of traditional finance (TradFi) with the innovation of decentralized finance (DeFi).
This report provides a detailed analysis of Ondo Finance's business model, operational processes, technological pathways, and how its RWA products are realized.
Ondo's strategic cornerstone is its 'compliance-first' approach established by a team with backgrounds from top financial institutions like Goldman Sachs. This traditional finance gene profoundly influences its product design, partner selection, and regulatory communication strategies, earning the trust of industry giants such as BlackRock and Morgan Stanley. The company operates a dual-track business model, simultaneously managing an asset management division (issuing tokenized products like OUSG and USDY) and a technology division (developing protocols and infrastructure such as Flux Finance, Ondo Global Markets, and Ondo Chain).
Its core RWA products are meticulously designed to meet the needs of different markets. OUSG is a tokenized U.S. short-term Treasury bond fund aimed at qualified investors in the U.S., achieving 24/7 instant subscriptions and redemptions through deep integration with BlackRock's BUIDL fund, addressing the pain point of traditional financial settlement delays. USDY, on the other hand, is an interest-bearing token backed by U.S. Treasury bonds and bank deposits, designed to serve as a widely used, composable collateral in the DeFi ecosystem.
On the technical level, Ondo's ambition goes beyond becoming an application layer protocol. It is building a vertically integrated financial ecosystem, with the ultimate goal of launching Ondo Chain — a Layer 1 public chain designed for RWA. This chain plans to employ innovative mechanisms such as RWA staking, permitted validator nodes, and native oracles to address the challenges current public chains face when dealing with regulated securities.
Ondo's competitive moat lies not only in its technology but also in its extensive and deep partner network, covering all aspects such as asset management, custody, compliance, and liquidity. However, the company also faces significant challenges, including unclear token value capture mechanisms, a valuation that is extremely high relative to current revenues, fierce competition from traditional financial giants and Web3 startups, and substantial regulatory and execution risks.
In summary, Ondo Finance's market value is not based on its current cash flows, but rather on the market's bullish option on its success in realizing the grand vision of 'Wall Street 2.0.' Whether it can transform from a successful asset management company into a provider of infrastructure for future on-chain financial markets will be key to determining its long-term value.
1. Ondo Finance Blueprint
1.1 Mission: Bridging the Worlds of DeFi and TradFi
The core mission of Ondo Finance is clear and grand: to bridge the gap between traditional finance (TradFi) and decentralized finance (DeFi), making institutional-level financial products and services accessible to everyone. This vision is succinctly summarized as building 'Wall Street 2.0,' aiming to leverage blockchain technology to transform the infrastructure and accessibility of financial markets.
The company's strategic foundation is deeply rooted in the backgrounds of its leadership team. Founders Nathan Allman and Pinku Surana both have work experience at top Wall Street institutions like Goldman Sachs. This is not merely a resume embellishment, but a core strategic asset. This background explains why Ondo has placed extreme emphasis on compliance since its inception, positioning it as a primary differentiating advantage. The company is one of the first DeFi projects to demonstrate strict legal compliance, with its users' assets transitioning on and off the chain managed by renowned institutions like Coinbase, BlackRock, and Clear Street.
This 'TradFi-first' mindset enables it to establish deep partnerships with financial giants like BlackRock and engage in high-level regulatory communication. For instance, it appointed former chair of the U.S. House Financial Services Committee Patrick McHenry as vice chair of the advisory board and met with the SEC to discuss the regulatory framework for tokenized securities. These initiatives indicate that Ondo's strategy is to first build a 'moat' based on trust and compliance, and then to solidify its technological advantages. Strong capital support also confirms market recognition of its team and vision, with the company successfully raising $46 million from top investment firms such as Founders Fund, Pantera Capital, and Coinbase Ventures.
1.2 Business Model: A Dual Approach of Asset Manager and Technology Provider
Ondo Finance's organizational structure is unique, divided into two mutually supportive core departments, forming its dual-pronged business model.
The first is the asset management department. This department focuses on creating and managing tokenized financial products and is the cornerstone of the company's current core business. Its main products include the Ondo Short-Term US Government Bond Fund (OUSG) aimed at institutions and the US Dollar Yield (USDY) aimed at global retail users.
The second is the technology department. This department is responsible for developing decentralized finance protocols and blockchain infrastructure, carrying the company's future growth potential. Its achievements include the decentralized lending protocol Flux Finance and the Layer 1 blockchain Ondo Chain designed for RWA.
This structure enables it to create revenue through different channels:
Asset Management Fees: For the OUSG product, Ondo charges institutional clients a management fee of 0.15% (currently waived until July 1, 2025) and a 0.15% fund operational fee.
Yield Spread: For the USDY product, Ondo retains a yield spread of approximately 0.5 percentage points from the income generated by the underlying assets as revenue.
Future Potential Revenue: As the ecosystem matures, transaction fees on Ondo Chain or the authorized use of its technology stack may become new sources of revenue.
Analysis of this model reveals that the current asset management business centered around RWA products has strategic significance far beyond merely collecting management fees.
These high-quality, stable-yield tokenized assets serve more as a 'bait' to attract capital and users. Through OUSG and USDY, Ondo has successfully attracted significant total value locked (TVL) and users, laying the foundation of liquidity and demand for building a more grand technological ecosystem — namely Ondo Chain and Ondo Global Markets.
The current relatively mild fee structure serves a larger goal: to establish a network effect and ultimately capture longer-term value through its technological infrastructure.
Ondo 'Wall Street 2.0' Financial System
1.3 Competitive Landscape and Market Share
With its compliance-first strategy and strong product-market fit, Ondo Finance has established a leading position in the RWA space. As of early 2025, Ondo ranks among the top three in the tokenized RWA market, with its TVL exceeding $1 billion.
Notably, in terms of the number of holders of tokenized U.S. Treasury bonds, Ondo holds over 90% market share, primarily due to the accessibility of its USDY product to non-U.S. retail investors.
Despite its impressive achievements, Ondo faces fierce competition from various dimensions:
Crypto Native Competitors: Hashnote (USYC) and Securitize are its main competitors in the Web3 space. Particularly, Hashnote has actively competed for market share by offering highly attractive yields.
Traditional Financial Giants: Institutions like BlackRock (BUIDL) and Franklin Templeton (FOBXX/BENJI) are both partners of Ondo and its most powerful potential competitors. They control the sources of RWA — i.e., the issuance of underlying assets — and have begun to personally launch their tokenized funds.
To better illustrate the competitive landscape, the table below compares the main participants in the tokenized Treasury bond market.
Competitive Landscape in Tokenized Treasury Bonds
Data Source: rwa.xyz. TVL and market share are dynamic data; approximate values during the reporting period are cited for illustration.
2. Ondo's RWA Product Matrix
2.1 OUSG: The Institutional Gateway to On-Chain Treasury Bonds
OUSG (Ondo Short-Term US Government Treasuries) is a tokenized fund that provides investors with exposure to short-term U.S. Treasury bonds. This product is designed for qualified purchasers and accredited investors, including those within the U.S.
Strategic Iteration Path
The underlying assets of OUSG have undergone a critical strategic iteration, which has profoundly impacted its product characteristics.
Initial Stage: Initially, OUSG's assets were primarily invested in BlackRock's iShares Short Treasury Bond ETF (SHV). However, traditional ETFs follow a T+2 settlement cycle, meaning there is significant time delay for users redeeming OUSG, which is a huge friction point in the 24/7 operating crypto market.
Strategic Transformation: In March 2024, as BlackRock launched its first tokenized fund BUIDL, Ondo swiftly acted to strategically transfer $95 million of OUSG's underlying assets to BUIDL. This move was decisive as it allowed OUSG to leverage BUIDL's on-chain characteristics, enabling 24/7/365 instant minting and redemption, completely resolving the pain point of settlement delays.
Current Portfolio: Today, OUSG's portfolio has evolved into a diversified tokenized fund portfolio, including BlackRock's BUIDL, Franklin Templeton's BENJI, WisdomTree's WTGXX, among others, supplemented by cash equivalents to ensure liquidity.
Legal and Operational Structure
The operation of OUSG is built on a fully institutional-grade, multi-party framework.
Legal Entity: The fund's legal structure is a limited partnership formed in Delaware, named Ondo I LP. Investors become limited partners in the fund by purchasing OUSG tokens.
Management Structure: The general partner of the fund is Ondo I GP LLC, and the investment manager is Ondo Capital Management LLC. Both companies are wholly owned subsidiaries of Ondo Finance, responsible for managing the fund and making investment decisions.
Asset Custody Chain: The custody path of assets is clear and secure. Investors' USDC is first deposited into Ondo's account at Coinbase. These funds are then used to purchase underlying assets such as BUIDL. Traditional securities (like early ETFs) are custodied by Clear Street, while assets of the BUIDL fund are custodied by BNY Mellon. On the crypto asset side, the OUSG tokens are supported by professional custodians like Zodia Custody and Komainu.
Fund Management: An independent third-party fund manager, NAV Consulting, is responsible for the fund's accounting, daily net asset value (NAV) calculation, and publishing financial reports, ensuring operational transparency and independence.
User Process
Qualification and Account Opening: Investors must meet the criteria of qualified purchasers or accredited investors and undergo KYC/AML (Know Your Customer/Anti-Money Laundering) screening.
Minting (Investment): Users connect their wallets and deposit USDC or PYUSD. The smart contract calculates the number of OUSG tokens to be issued based on the current NAV and transfers the stablecoin to the fund's account at Coinbase to purchase the underlying assets. The minimum investment for immediate transactions is $5,000.
Redemption: Users initiate a redemption request. The number of OUSG tokens held multiplied by the current NAV yields the USDC value to be returned. The entire process can be conducted 24/7.
Yield and Fee Mechanisms
Yield: The annual percentage yield (APY) of OUSG, for instance, 4.09%, comes from the interest generated by its investment in U.S. Treasury bond funds. The yield is reflected in the cumulative growth of the OUSG token price (i.e., NAV). Additionally, Ondo offers a 'rebasing' version, rOUSG, whose price remains pegged at $1, with yield distributed to holders in the form of new tokens issued daily.
Fees: The fund charges a management fee of 0.15% (waived until July 1, 2025) and a maximum fund operational fee of 0.15%.
Ondo's rapid adoption of BUIDL is a textbook example of strategic action. This move not only addressed the biggest pain point of OUSG (settlement delays) but also made Ondo a key launch partner for BlackRock's milestone product, at one point holding 38% of the total supply of BUIDL. This has transcended a simple customer relationship, forming a deep strategic symbiosis. Ondo provides on-chain distribution channels for BlackRock's institutional-grade products, while BlackRock offers Ondo unparalleled legitimacy and the technological foundation for 24/7 liquidity. This symbiotic relationship constitutes a strong competitive advantage.
Differences and Connections with BUIDL
Superficially, OUSG and BUIDL are both tokenized products based on Treasury bonds. However, the descriptions above reveal that there are quite a few differences between the two.
In simple terms, OUSG is a 'fund of funds' managed by Ondo Finance, pooling investor funds to invest in a basket of tokenized U.S. Treasury bond funds, including BlackRock's BUIDL.
Their relationship is symbiotic: Ondo is a major customer and important distribution channel for BlackRock's BUIDL; while BUIDL provides the critical technological foundation for OUSG to achieve its core function — 24/7 instant subscriptions and redemptions.
Key Differences between OUSG (Ondo) and BUIDL (BlackRock)
BUIDL is a wholesale product: its target customers are other funds, cryptocurrency companies, market makers, and large institutional investors that need to manage their vast on-chain treasury. BUIDL provides them with a basic, highly liquid, yield-generating underlying asset.
Ondo operates through retail (or professional retail) channels: Ondo acts as a distributor. It procures the 'raw material' BUIDL, packages it with other products, adds its own services (such as lower investment thresholds, more convenient user interfaces, cross-chain capabilities, etc.), and then sells it to a broader customer base that still needs to meet the accredited investor criteria.
2.2 USDY: A Global Interest-Bearing Stablecoin Alternative
USDY (Ondo US Dollar Yield) is a tokenized note backed by short-term U.S. Treasury bonds and bank demand deposits. It is designed as an interest-bearing stablecoin alternative, primarily aimed at non-U.S. individual and institutional investors.
Structure and Collateral
Legal Structure: USDY is issued as a debt instrument by a bankruptcy-remote entity, Ondo USDY LLC, based in Delaware. This structure aims to legally isolate the assets supporting USDY from the balance sheet of Ondo Finance to protect investor assets in extreme circumstances.
Underlying Assets: Its collateral consists of a portfolio of short-term U.S. Treasury bills and bank demand deposits.
Over-Collateralization: The portfolio implements over-collateralization, previously mentioned to have a 3% buffer. To ensure transparency, Ondo publishes daily reserve proof provided by a third party.
⭐ Complete Process for Non-U.S. Investors
Qualification and Account Opening: Limited to non-U.S. individuals or entities that have completed the KYC/AML process.
Investment: Users can invest via USDC, USDT, or wire transfer in U.S. dollars. Interest begins to accrue once funds are processed.
Transfer Restrictions ('40-50 Days Lock-Up Period'): This is the most critical compliance design of USDY. To comply with Regulation S exemptions under U.S. securities law, newly minted USDY tokens are non-transferable for 40 to 50 days after purchase. During this period, investors hold a 'temporary global certificate.' After the lock-up period, tokens will be freely transferable on-chain.
Redemption: USDY can only be redeemed for U.S. dollars via wire transfer, and must be wired to a non-U.S. bank account.
Similar to OUSG, the standard version of USDY is an accumulating token whose value increases with yield growth. Ondo also offers a rebasing version, rUSDY, to cater to users who prefer a stable price of $1 and earn yield by receiving additional tokens.
If OUSG is a compliant product established by Ondo for institutional investors with strict access 'firewalls,' then USDY is its main tool for penetrating the broad DeFi ecosystem. Its native deployment on multiple mainstream public chains such as Ethereum, Solana, Arbitrum, and Sui, along with its fully permissionless transfer characteristics after the lock-up period, make it an ideal composable 'money LEGO.' Ondo is actively promoting USDY as a reserve asset for decentralized autonomous organizations (DAOs) like Arbitrum and MakerDAO, and intends to use it in lending and payment scenarios. Despite the compliance-driven 40-day lock-up period causing some friction in usage, its strategic goal is clear: to make USDY a ubiquitous and yield-generating high-quality collateral asset in the entire DeFi world.
2.3 Product Comparison and Strategic Intent
To clearly articulate the different strategic positions of Ondo's two flagship products, the table below compares their key characteristics.
Ondo Finance RWA Product Comparison (OUSG vs. USDY)
2.4 OMMF: A Strategic Contraction
Product Launch: Ondo announced the launch of OMMF (Ondo US Money Markets) in April 2023, a tokenized money market fund aimed at maintaining a stable price of $1 and distributing yield through the issuance of new tokens.
Product Withdrawal: However, according to a third-party risk assessment report from April 2024, Ondo 'withdrew the plan for the tokenized money market fund ($OMMF).'
The quiet withdrawal of OMMF stands in stark contrast to the high-profile launch of other products, revealing the Ondo team's strategic discipline and realistic market judgment.
In the mental model of on-chain users, the difference between tokenized money market funds (MMF) and tokenized short-term Treasury Bill (T-Bill) products (such as OUSG) may not be significant; both serve the core need for simple, secure yields. Continuing to advance OMMF may dilute its marketing resources and liquidity, with limited marginal benefits. A decisive abandonment of this product line indicates that Ondo is not blindly expanding but is continuously assessing product-market fit and is capable of 'cutting off its arm to survive.'
This strategic clarity and execution discipline are positive signs of its long-term development potential.
3. Technology Stack: Constructing the Track for 'Wall Street 2.0'
3.1 Core Protocol: Empowering On-Chain Utility
Ondo has developed a series of protocols aimed at providing on-chain utility for its RWA products and laying the groundwork for broader financial markets.
Flux Finance: This is a decentralized lending protocol based on a Compound V2 fork. Its core innovation lies in its ability to simultaneously support permissionless tokens like USDC and permissioned RWA tokens like OUSG as collateral. To achieve this, Flux introduces a whitelisting mechanism, where only addresses that have passed compliance checks can liquidate positions in restricted assets like OUSG, thus creating a 'permissioned DeFi' environment. Governance of the protocol is held by the Ondo DAO, with ONDO token holders making decisions collectively.
Ondo Global Markets (GM): This is one of Ondo's most ambitious platforms, aiming to tokenize and bring on-chain thousands of publicly traded securities (including stocks, bonds, and ETFs). The platform has launched on Solana, targeting to offer 24/7 trading services while deeply integrating with Solana's DeFi ecosystem. Its target audience consists of non-U.S. investors. Technically, the platform utilizes dynamic bonding curves and integration with decentralized exchanges (DEX) like Meteora to provide initial liquidity for assets.
Nexus Asset Issuance Protocol: This protocol aims to provide instant liquidity for tokenized Treasury bonds issued by third parties, achieving this by positioning OUSG as a shared liquidity layer across issuers. This design elevates OUSG's positioning from a purely investment product to a core market infrastructure level, demonstrating Ondo's intent to play a more foundational role in the RWA ecosystem.
3.2 Ondo Chain: A Layer 1 Tailored for RWA
Ondo's ultimate technical vision is embodied in the Ondo Chain that it is building. This is a public, proof-of-stake Layer 1 blockchain designed specifically for institutional-grade RWA.
Architectural Design and Innovation:
RWA Staking: Unlike traditional PoS chains which can only stake native tokens, Ondo Chain allows validators to stake RWAs (such as tokens issued by OUSG or Ondo GM) to secure the network. This design aims to reduce reliance on highly volatile crypto assets for network security.
Permitted Validator Nodes: Validators on the Ondo Chain will consist of regulated financial institutions (disclosed potential participants include Franklin Templeton, Wellington, WisdomTree, etc.). This design aims to prevent malicious behaviors such as front-running and fundamentally enhance the compliance level of the network.
Native Oracles: Validators will natively and securely publish key off-chain data like asset prices to the chain through a consensus mechanism, thus eliminating reliance on third-party oracle services for executing core functions, reducing systemic risk and costs.
Using RWA to Pay Gas: Ondo Chain will allow users to pay transaction fees (Gas fee) using RWA tokens, which is a key usability improvement for institutions wishing to operate on-chain but are constrained to holding specific assets.
Ondo believes that general public chains are not optimized for regulated securities. These securities have complex requirements regarding compliance, corporate actions (such as stock splits), and identity verification, which existing blockchains cannot adequately meet. The birth of Ondo Chain is intended to address these specific issues from the ground up.
The development of Ondo Chain reveals the company's ultimate strategy: vertical integration.
Ondo is not content with merely building applications on other public chains; it is committed to controlling the entire technology stack from asset tokenization (OUSG, USDY, GM) to lending/trading layers (Flux, GM platform) to the underlying settlement layer (Ondo Chain). This vertical integration, once successful, will grant Ondo tremendous market control, reduce reliance on external protocols, and enable it to capture value at every stage of the value chain. This is undoubtedly a high-risk strategy, but it also offers the potential for high rewards.
3.3 Interoperability and Security
Cross-Chain Strategy: Ondo achieves native cross-chain functionality for tokens through its Ondo Bridge. This bridge employs a 'burn-and-mint' mechanism, supported by leading interoperability protocols like Axelar and LayerZero. This approach avoids the inherent security risks of traditional 'wrapped assets' models, ensuring that USDY is a native asset on each supported chain, effectively preventing liquidity fragmentation.
Security Status and Audit Findings: Ondo places great importance on security by ensuring the robustness of its smart contracts through regular third-party code audits (conducted by firms like Code4rena, NetherMind, Zokyo, etc.) and a public bug bounty program. The September 2023 Code4rena audit report identified four medium-risk vulnerabilities, including the inability to remove or clear support for a certain chain in bridge contracts, potential permanent loss of funds for users using account abstraction wallets when bridging assets, different transactions from different source chains potentially generating the same transaction hash and disrupting approval processes, and administrators being unable to destroy tokens from blacklisted addresses.
4. Ecosystem and Partnerships
4.1 Partner Network Landscape
Ondo has successfully built a multi-layered partner ecosystem that spans TradFi and DeFi, which is crucial for a company aimed at connecting the two worlds.
Traditional financial asset managers and banks: This is the foundation of Ondo's legitimacy and asset quality. Partners include BlackRock, Franklin Templeton, Wellington Management, WisdomTree, Morgan Stanley, JPMorgan, ABN AMRO, etc. These partnerships not only provide Ondo with high-quality underlying asset sources but also bring invaluable institutional credibility.
Crypto custodians and financial service providers: This is the institutionalized assurance of Ondo's operations. Partners include Coinbase (crypto asset custody and brokerage), BNY Mellon (custodian for the BUIDL fund), Clear Street (ETF custodian), NAV Consulting (fund manager), Ankura Trust (trust services), and both Zodia Custody and Komainu (crypto asset custodians). This network forms the backbone of its institutional-level operations.
Blockchain Platforms: This is the channel for distributing Ondo's products. Ondo's products have been deployed on multiple mainstream public chains including Ethereum, Solana, Polygon, Arbitrum, Sui, Aptos, Cosmos (via Noble), and XRP Ledger. The extensive deployment ensures accessibility and network effects for its products.
DeFi Protocols: This reflects the on-chain utility of Ondo's products. Partners include MakerDAO and Arbitrum DAO (using Ondo products as reserve assets), Pendle, Drift, Helio, Sphere, etc. (for product integration). These collaborations inject composability into Ondo's RWA assets.
Interoperability Protocols: These are the bridges connecting various islands. Axelar and LayerZero provide underlying technical support for Ondo's native cross-chain bridge.
4.2 Strategic Value Analysis
Ondo's partner network is not only the foundation of its business operations but also a powerful, non-technical competitive moat. In the Web3 world, code can be forked, but rebuilding such a deep, multi-layered trust network spanning TradFi and DeFi is extremely difficult. Each collaboration with institutions such as BlackRock, Coinbase, or NAV Consulting represents a lengthy and rigorous process of due diligence, legal compliance, and technical integration.
This network provides Ondo with a form of 'institutional certification,' which is crucial for attracting risk-averse institutional capital. When a new project seeks to enter the RWA space, it faces not only technical challenges but also barriers of trust and relationships.
From this perspective, Ondo's ecosystem itself may be more valuable and harder to replicate than its current codebase.
5. ONDO Token Economics: Governance, Value, and Future Potential
5.1 Token Distribution and Release Mechanism
Total Supply and Inflation: The total supply of ONDO tokens is fixed at 10 billion, with no planned inflation mechanism.
Distribution Structure: The distribution of tokens aims to balance the interests of the community, investors, and core team.
Ecosystem Growth: 52.1% (5.21 billion tokens). Used for airdrops, incentives, partner support, etc., with 24% unlocking at the token generation event (TGE) and the remainder gradually released over 5 years.
Protocol Development (Core Contributors/Team): 33% (3.3 billion tokens)
Private Sale (Seed Round/A Round): Approximately 12.9% (1.29 billion tokens). 1-year lock-up + 48 months of linear release.
Community Public Sale (via CoinList): Approximately 2% (198.88 million tokens). About 90% unlock at TGE, 1-year lock-up + 6/18 months of linear release.
Until the DAO votes on January 18, 2024, the transfer of ONDO tokens is restricted. After unlocking, most tokens allocated to investors and the team will still be subject to strict, multi-year linear release schedules. For instance, tokens for private investors typically have a 1-year lock-up period, followed by a 48-month linear release.
5.2 Governance Utility
Currently, the primary and explicit utility of the ONDO token is governance. Holders can participate in the decision-making of the Ondo DAO, which oversees protocols like Flux Finance. Token holders can vote on proposals regarding protocol upgrades, fee structure adjustments, and the addition of collateral assets.
As Ondo's ecosystem develops, the utility of the ONDO token is expected to expand. It is highly likely to become the core governance token of Ondo Chain, used for electing validators and determining eligible staking assets. Additionally, there is widespread market expectation that ONDO will eventually be used for network security staking and earning yield, or enjoying fee discounts within the ecosystem, or even participating in some form of value return mechanism (such as buyback and burn), although these mechanisms have not yet been formally implemented.
5.3 Critical Analysis of Value Capture
Multiple analysis reports indicate that the ONDO token currently lacks a strong and direct value capture mechanism. Its utility is primarily limited to governance, while users utilizing Ondo's RWA products (such as OUSG or USDY) do not need to hold or use ONDO tokens.
Despite the relatively limited direct revenue generated by the protocol (one report estimates annual revenue at less than $10 million), the ONDO token maintains a fully diluted valuation (FDV) in the billions.
This phenomenon indicates that the market's pricing of ONDO is not based on its current cash flows or direct utility.
Conversely, the market views it as a bullish option on the grand narrative of 'Wall Street 2.0.' Its price reflects a collective belief that Ondo will successfully launch disruptive infrastructures such as Ondo Chain and Global Markets, and that the ONDO token will ultimately capture significant value from this vast ecosystem (for example, through staking rewards, transaction fee sharing, etc.). This makes the value of ONDO's token highly sensitive to changes in market narratives and the execution capabilities of the team's roadmap.
Its high FDV and large amount of unlocked token supply constitute a significant valuation risk — if execution falls short of expectations or market narratives shift, token prices may face severe adjustments.
6. Comprehensive Analysis and Outlook
6.1 Key Risks and Mitigation Measures
Regulatory Risk: The legal framework for tokenized securities is still evolving, which poses the main threat Ondo faces. Ondo actively manages this risk by engaging with regulators, hiring policy experts, and carefully designing product structures within existing legal frameworks (such as Regulation D and Regulation S).
Execution Risk: Ondo's roadmap (especially Ondo Chain and Global Markets) is extremely ambitious and complex, with high execution difficulty. The company adopts a phased launch strategy, backed by an experienced team and strong venture capital support to ensure development. However, this remains the highest internal risk it faces.
Competitive Risk: Traditional financial giants are fully capable of establishing their own RWA ecosystems, thereby bypassing intermediaries like Ondo. Ondo is trying to build strong network effects through its extensive partner ecosystem and contest the first-mover advantage in constructing a compliant on-chain financial center.
Valuation Risk: As noted earlier, the high valuation of the token is entirely built on optimistic expectations for the future. A series of measures proposed in current DAO votes are gradually setting long-term token release schedules for insiders and early investors, aiming to ensure long-term alignment of interests and prevent premature selling, thereby stabilizing market expectations to some extent.
6.2 Strategic Outlook
With its unique strategy of prioritizing institutional trust and regulatory compliance, Ondo Finance has successfully positioned itself as a top competitor in the RWA space. Its exceptional leadership team, strong partner network, and meticulous product structure together build a solid foundation.
However, the project is at a critical crossroads. Its current success is primarily built on several relatively simple but well-executed tokenized Treasury products. Its multi-billion dollar valuation bets on a more ambitious future: creating a brand new, vertically integrated layer of on-chain financial infrastructure.
The ultimate success or failure of Ondo will depend on its ability to bridge the execution gap from a successful asset manager to a future 'Wall Street 2.0' infrastructure provider.
For mature investors, Ondo offers a clear albeit high-risk bet on the grand trend of institutional adoption of public chain technology. The road ahead is fraught with regulatory, competitive, and technological challenges, but the potential rewards of achieving its ultimate goal — occupying a core position in the future financial system — are equally significant.
Partial Reference
Ondo Research — BlockBase Insights, https://insights.blockbase.co/ondo-research/
Are Ondo and Ondo Finance the Same? A Deep Dive into Their Role in Tokenized Finance, https://www.okx.com/en-us/learn/ondo-vs-ondo-finance-tokenized-finance
Ondo: Product Line, Competitive Landscape, and Token Valuation …, https://research.mintventures.fund/2025/5/16/Ondo-Product-Line-Competitive-Landscape-and-Token-Valuation-of-a-Leading-RWA-Project/
What is Ondo Finance? Future of RWAs and DeFi — NFTevening, https://nftevening.com/what-is-ondo/
Final Report — Ondo (OUSG) — Particula, https://particula.io/wp-content/uploads/2024/06/Digital-Asset-Risk-Rating-Report-Ondo-OUSG-April-2024.pdf
Ondo Finance, Real-World Asset: Investor Guide, https://www.diadata.org/rwa-real-world-asset-map/ondo-finance/
What Is Ondo ($ONDO)? Everything You Need to Know, https://www.osl.com/hk-en/academy/article/what-is-ondo-usdondo-everything-you-need-to-know
How Does Ondo Finance Work? — CanvasBusinessModel.com, https://canvasbusinessmodel.com/blogs/how-it-works/ondo-finance-how-it-works
Ondo Finance moves $95 million worth of OUSG to BlackRock’s BUIDL — FXStreet, https://www.fxstreet.com/cryptocurrencies/news/ondo-moves-95-million-worth-of-ousg-assets-to-buidl-as-tokenized-fund-attracts-245-million-since-debut-202403281030
Ondo Finance eyes tokenized treasury expansion amid crypto bull market — Cointelegraph, https://cointelegraph.com/news/ondo-finance-eyes-tokenized-treasury-expansion-amid-crypto-bull-market
Stablecoins: What is $USDY by Ondo Finance? — MyEtherWallet, https://www.myetherwallet.com/blog/stablecoins-what-is-usdy-by-ondo/
Ondo Finance Launches Ondo Global Markets on Solana for Tokenized Asset Trading, https://www.ainvest.com/news/ondo-finance-launches-ondo-global-markets-solana-tokenized-asset-trading-2505/
Introducing Ondo Chain: The Omnichain Network for RWAs, https://blog.ondo.finance/introducing-ondo-chain/
Ondo Finance and Axelar Integrate for Cross-Chain Tokenized Secure Notes, https://www.axelar.network/blog/ondo-finance-cross-chain-stablecoin
In-depth analysis of Ondo Finance: Web3 investment bank’s practice of putting US debt on the blockchain — Binance, https://www.binance.com/en/square/post/4888261888578
Special Statement: All articles by DePINone Labs are for informational and educational purposes only and do not constitute any investment advice.
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