I spent a lot of time reading about #RWAs and found it confusing, even contrived, and unrealistic. Until I learned about Ondo Finance, I had a completely different perspective, and also understood why RWAs were recognized by J.P. Morgan describes it as “Killer app for TradFi”. If you are feeling the same way, don't skip this article!

I. What is Ondo Finance?

  • Category: RWAs

Ondo Finance is simply a protocol that provides institutional-grade financial products to cryptocurrency investors.

II. Ideas, products

  1. Idea

Realizing that in the difficult context of the Crypto market over the past year, safe investments are prioritized above all. Ondo Finance offers cryptocurrency investors access to #ETFs US Bonds - arguably the lowest-risk and most liquid investment asset available today.

The special feature of Ondo Finance lies in its products and processes.

  1. Products and technology

    📍OUSG

A key product with a TVL of $167M, associated with the name of Ondo Finance. OUSG can be simply understood as iShares' US government bond ETF tokenization product. Buying OUSG means you own a portion of iShares short-term US bond ETF certificates. iShares' ETF has net assets of more than $20 billion and is managed by #BlackRock

Cơ chế của Ondo Finance sẽ cho ae thấy rõ cách kết nối giữa Trafi và Defi trong RWAs:

  1. User KYC/AML, reads and signs regulations, provides wallet address to Ondo Finance.

  2. Once approved, users send USDC to the Fund's smart contract (min $100k).

  3. USDC is transferred to the Fund's account at Coinbase

  4. Ondo IM will convert the USDC to USD at Coinbase, they will then transfer the USD through one of their partner banks to the fund's cash account at Clear Street (Clear Street is the stockbroker and custodian). Qualified candidates will hold off-chain assets and execute trading orders for the fund)

  5. NAV Consulting will calculate the next day's NAV (net asset value), rechecking the user's purchase request.

  6. Ondo Finance will issue OUSG representing users' shares in the fund. At the same time, Ondo IM will use USD at Clear Street to buy ETF.

It can be seen that Ondo Finance's process requires the participation of many units and organizations: Ondo Finance, Coinbase, financial supervision units such as Clear Street, fund management consulting units such as NAV Consulting, ETF of Blackrock,... All this brings the most transparency and safety to investors.

📍USDY

USDY is Ondo Finance's next product after OUSG, a stablecoin that is different from other stablecoins on the market today:

  1. Backed by short-term US bonds and US bank demand deposits.

  2. Comply with US law

  3. There is a third unit, Ankura Trust, that monitors Ondo Finance's activities to protect users' assets.

  4. Holding USDY will yield APR returns at 5%

III. Operational results

For a simple comparison, let's look at the performance of different assets over the past year (November 2021 - November 2022). During this time period, the S&P 500 is down almost 16%, NASDAQ is down almost 28%, BTC has fallen almost 75%. Meanwhile, SHV - the short-term US Treasury ETF - actually increased 0.8%.

It can be said that Ondo Finance's products come at the right time, especially when the FED continuously raises interest rates, leading to unprecedented highs for US bonds in the past decade. TVL reaching over $200M is the result that proves that.

Currently, Ondo Finance is the No. 1 project in the RWAs Debt Market segment and the project with the 3rd highest TVL in the entire RWAs space.

IV. Project resources

  1. Team

Ondo Finance có đội ngũ giàu kinh nghiệm trong tài chính truyền thống và blockchain. Nổi bật nhất là founder-CEO Nathan Allman và COO Justin Schmidt. Họ có quãng thời gian làm việc tại các quỹ đầu tư và quản lý cấp cao mảng tài sản số tại ngân hàng Goldman Sachs.

  1. Backers & Investors

Ondo Finance đã gọi vốn được hơn $24M sau 2 vòng gọi vốn. Cụ thể:

  • Seed Round - August 2021: raised $4M lead by Pantera Capital with the participation of 15 other investors.

  • Series A - April 2022: raised $20M lead by Founders Fund and Pantera Capital in addition to 7 other investors. Founder of Founders Fund is Peter Thiel - also the founder of PayPal.

V. Tokenomics

  1. Token Metrics

  • Ticker: ONDO

  • Blockchain: Ethereum

  • Token Standard: ERC-20

  • Contract: 0xfaba6f8e4a5e8ab82f62fe7c39859fa577269be3

  • Total Supply: 10.000.000.000

  • ICO Coinlist: 12/05/2022

  • IDO Price: 0.055$

  • ONDO tokens have not been opened for sale yet

  1. Token Use Cases

ONDO is the project's governance token. It is expected that in the future when the project opens token trading, ONDO's Usecase will be more detailed.

  1. Token inflation/deflation

  • Deflation: There is currently no information that the project has a burn or buyback mechanism to deflate tokens.

  • Inflation: It has not been clearly confirmed whether the project has a maximum total supply limit or not.

  1. Token Allocation & Distribution

  • Seed Round (3%) và Series A (10%): Lock 1 năm, vesting dần trong 24 tháng kể từ T6/2023

  • Coinlist option 1 (4%): Lock for 1 year, vesting gradually over 6 months from June 2023

  • Coinlist option 2 (1%): Lock for 1 year, vesting gradually over 18 months from June 2023.

BECAUSE. Community

  1. Project data information channels

  • https://twitter.com/OndoFinance

  • https://ondo.finance/

  • https://github.com/ondoprotocol

  1. Evaluate the performance of Social channels

The project social operates regularly and stably, posting updates on the project's development situation.

  1. Github

Activity takes place on Github infrequently.

  1. Upcoming important events

No data yet

VII. Conclude

  1. Plus mark

  • Strong team and investors

  • Practical products have been proven by the market, meeting the trend of potential RWAs. Top 3 projects in RWAs field

  1. Minus point

  • There is not much information about tokenomics

  • Financial markets are hot again, US interest rates have almost peaked, so Ondo Finance's OUSG is likely to be less attractive.

  • OSSG is for Whales and organizations only. USDY is available to everyone but the USDY token is not yet supported by other DEFI protocols.

Overall, Ondo Finance is an extremely worthwhile project to wait for in the near future, especially when the RWAs trend flares up, this will be one of the most prominent products. With the resource base and what has been achieved, the project can completely expand its products further to suit market conditions. Thereby, attracting more users.

$ONDO #Write2Earn #trend