Ondo Finance (ONDO), RWA Stablecoin Platform

Ondo Finance is a platform that allows users to earn returns from tokenized versions of real-world assets (RWAs).

Through a decentralized financial system, investors can explore institutionally standardized assets based in the US while engaging in DeFi developments.

This article discusses Ondo Finance, its workings, features, team and investors, as well as the tokenomics of the ONDO token.

What is Ondo Finance?

Ondo Finance is a platform leveraging tokenized real-world assets (RWAs) to enable users to gain returns from these tokenized assets.

The platform aims to build next-generation financial infrastructure by merging traditional financial systems with blockchain technology. By combining these concepts, Ondo Finance aims to create a more efficient and accessible market for everyone, regardless of geographical boundaries.

How Does Ondo Finance Work?

Ondo Finance operates on the idea of tokenized assets. The underlying assets come from assets traded on exchanges managed by leading companies such as BlackRock and Pimco.
Ondo Finance purchases shares in these traditional assets and then uses its own blockchain system to represent these assets as tokens. Each token has a price based on the real-world value it represents.

Users can buy and sell these tokenized real-world assets through Ondo, eliminating the need for investors to directly purchase assets traded on exchanges through traditional hedge fund managers.

Features of Ondo Finance

Ondo Finance features are available in several different types. Here are the features offered:

USD Yield Token (USDY)

USD Yield (USDY) is a tokenized real-world asset backed by US Department of Treasury securities, offering attractive returns.

USDY holders earn a 5.1% APY return. In addition to the high-interest rates, USDY tokens also provide access to investor protection, helping prevent token value loss.

OMFF Token

This tokenized real-world asset provides exposure to the money market fund. OMFF is a stablecoin backed by US government money market funds. Unlike the money market with opening and closing hours, OMFF tokens can be transferred anytime. OMFF tokens are based on the Ethereum network.

OUSG Token

OUSG Token is based on US Short-Term Bonds. These institutionally standardized investments are intended to be more stable and predictable, making them attractive to stablecoin holders. The OUSG fund supporting OUSG tokens comes from ETFs Short-Term US Treasury Bond stocks, along with real USD.

Image: USDY yield. Source: Ondo Finance

Flux Finance

Flux Finance offers a lending protocol for users in need of crypto assets. This decentralized lending protocol is supported by OUSG tokens and other stable collateral forms. Users deposit USDC and other stablecoins, then receive fStable tokens that can be used for other DeFi strategies.

Ondo Finance Team and Investors

Ondo Finance was founded by Nathan Allman, a Stanford University graduate with a focus on economics and business. Allman has worked at several traditional financial companies, including Goldman Sachs and ChainStreet Capital.

The project successfully raised $24 million in funding divided into two rounds: seed funding and Series A. Seed funding in August 2021 raised $4 million from investors: Digital Currency Group (DCG), Bixin Ventures, CMS, and Chapter One. Series A funding in April 2022 raised $20 million from investors: Pantera, Founder Funds, Wintermute, and Tiger Global.

ONDO Tokenomics

The native platform token, ONDO, has a total supply of 10 billion tokens. These tokens serve as governance tokens. Here is the token distribution:

Image: ONDO token distribution. Source: Token Unlocks

5.21 billion tokens (52.1% of the total supply) are used for ecosystem growth.
3.3 billion tokens (33% of the total supply) are used for protocol development.
1.29 billion tokens (12.9% of the total supply) are used for private sales.
198.88 million tokens (1.98% of the total supply) are used for community airdrops.

Conclusion

Ondo's approach, particularly focusing on US government-backed assets, presents intriguing opportunities for conservative investors looking to enter the crypto space with minimal risk. With its specialization in tokenizing these assets, Ondo's value is directly influenced by US government macro and micro policies.
Nevertheless, its core mission of democratizing access to institutional-level financial products, coupled with technical expertise and regulatory compliance, provides a diverse and measured future for Ondo.

*Disclaimer:

This content aims to enrich reader information. Always conduct independent research and use disposable income before investing. All buying, selling, and crypto asset investment activities are the reader's responsibility.