In-depth Research Report | Ondo Finance: How to Achieve "Wall Street 2.0"?

Ondo is not satisfied with merely building applications on other public chains; it is committed to mastering the entire technology stack from asset tokenization (OUSG, USDY, GM), to lending/trading layers (Flux, GM platform), and down to the underlying settlement layer (Ondo Chain).

Summary

Ondo Finance has become a key player in the tokenization of Real-World Assets (RWA), with its core mission being to democratize institutional-grade 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 the implementation of its RWA products.

The strategic cornerstone of Ondo is its "compliance-first" approach, established by a team with backgrounds in 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 like BlackRock and Morgan Stanley. The company operates a dual-track business model, running both 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 government bond fund aimed at U.S. qualified investors, achieving 24/7 instant subscription and redemption through deep integration with BlackRock's BUIDL fund, addressing the pain point of traditional financial settlement delays. USDY is an interest-bearing token backed by U.S. Treasury bonds and bank deposits, designed to serve as widely used, composable collateral in the DeFi ecosystem.

On the technical front, Ondo's ambitions extend 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 specifically designed for RWA. This chain plans to incorporate innovative mechanisms such as RWA staking, permissioned validation nodes, and native oracles to address the challenges 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 of asset management, custody, compliance, and liquidity. However, the company also faces significant challenges, including ambiguous 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 flow but rather on the market's bullish options regarding its ambitious vision of achieving "Wall Street 2.0." Whether it can transform from a successful asset management company into a foundational infrastructure provider 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

Ondo Finance's core mission is clear and grand: to bridge the gap between traditional finance (TradFi) and decentralized finance (DeFi), making institutional-grade 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 experience working 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 immense 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 user assets managed on-chain and off-chain by well-known institutions such as 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 example, it appointed former U.S. House Financial Services Committee Chairman Patrick McHenry as vice chairman of its advisory board and met with the U.S. Securities and Exchange Commission (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 solidify its technological advantages. Strong capital support also reflects market recognition of its team and vision, as the company has successfully raised $46 million from top investment institutions such as Founders Fund, Pantera Capital, and Coinbase Ventures.

1.2 Business Model: Dual Approach as Asset Manager and Technology Provider

Ondo Finance's organizational structure is unique, divided into two mutually supportive core departments, forming its dual approach business model.

The first is the Asset Management Division. This division focuses on creating and managing tokenized financial products, serving as the cornerstone of the company's current core business. Its main products include the institutional-focused Ondo Short-Term US Government Bond Fund (OUSG) and the globally available US Dollar Yield (USDY).

The second is the Technology Division. This division 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 allows it to generate 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 fund operating fee of 0.15%.
Yield Spread: For the USDY product, Ondo retains about 0.5 percentage points of the yield generated from the underlying assets as income.
Future Potential Revenue: As the ecosystem matures, transaction fees on Ondo Chain or licensing of its technology stack may become new sources of income.

Analysis of this model reveals that the current asset management business centered on RWA products has strategic significance far beyond merely collecting management fees.

These high-quality, stable-yielding tokenized assets serve more as "bait" to attract capital and users. Through OUSG and USDY, Ondo has successfully attracted a significant total value locked (TVL) and user base, laying the foundation of liquidity and demand for building a larger technological ecosystem — namely Ondo Chain and Ondo Global Markets.

The currently relatively moderate fee structure serves a larger goal: to establish network effects and ultimately capture longer-term value through its technological infrastructure.

Ondo's "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 surpassing $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 openness 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 rivals in the Web3 space. Notably, 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 and formidable potential competitors of Ondo. They control the sources of RWA — the issuance of underlying assets — and have begun to launch their own tokenized funds.

To clearly illustrate the competitive landscape, the following table compares the main participants in the tokenized treasury bond market.

Competitive Landscape in the Tokenized Treasury Bond Space

Data Source: rwa.xyz. TVL and market share are dynamic figures; 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 investors within the United States.

Strategic Iteration Path

The underlying assets of OUSG have undergone a critical strategic iteration, which has had a profound impact on its product characteristics.

Initial Phase: Initially, the assets of OUSG were primarily invested in BlackRock's iShares Short Treasury Bond ETF (SHV). However, traditional ETFs follow a T+2 settlement cycle, which means there is a significant time delay for users redeeming OUSG, creating a major friction point in the 24/7 operating crypto market.
Strategic Transformation: In March 2024, with BlackRock launching its first tokenized fund BUIDL, Ondo quickly took action 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, effectively resolving the settlement delay issue.
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 legal structure of the fund is a limited partnership based 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 the fund's management and investment decisions.
Asset Custody Chain: The custody path of the 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 like BUIDL. Traditional securities (such as early ETFs) are custodied by Clear Street, while the assets of the BUIDL fund are custodied by BNY Mellon. On the crypto asset side, OUSG tokens are supported by professional custodians such as 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 financial reporting, ensuring operational transparency and independence.

User Process

Qualification and Account Opening: Investors must meet the standards of qualified purchasers or accredited investors and pass KYC/AML (Know Your Customer/Anti-Money Laundering) checks.
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 underlying assets. The minimum investment for instant transactions is $5,000.
Redemption: Users initiate a redemption request. The number of OUSG tokens held is multiplied by the current NAV to determine the USDC value to be returned. The entire process can be conducted 24/7.

Yield and Fee Mechanism

Yield: The annual percentage yield (APY) of OUSG, for example, 4.09%, comes from the interest generated by its investments in U.S. Treasury bond funds. The yield is reflected in the accumulation of the OUSG token price (i.e., NAV). Additionally, Ondo offers a "rebasing" version rOUSG, which maintains a price of $1, with yields distributed to holders in the form of newly issued tokens daily.
Fees: The fund charges a management fee of 0.15% (waived until July 1, 2025) and a maximum fund operating fee of 0.15%.

Ondo's rapid adoption of BUIDL can be seen as a textbook strategic action. This move not only addressed OUSG's biggest pain point (settlement delays) but also positioned Ondo as a key launch partner for BlackRock's milestone product, once holding 38% of BUIDL's total supply. This has transcended a simple client relationship, forming a deep strategic symbiosis. Ondo provides on-chain distribution channels for BlackRock's institutional-grade products and a window to a broader investor base, while BlackRock offers Ondo unparalleled legitimacy and the technical foundation for 24/7 liquidity. This symbiotic relationship constitutes a powerful competitive advantage.

Differences and Connections with BUIDL

On the surface, OUSG and BUIDL are both tokenized products based on Treasury bonds. However, the above description reveals that there are significant differences between the two.

In simple terms, OUSG is a "fund of funds" managed by Ondo Finance, pooling investors' 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 client and important distribution channel for BlackRock's BUIDL; while BUIDL provides the key technical foundation for OUSG to achieve its core functionality — 24/7 instant minting and redemption.

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 substantial on-chain capital pools. BUIDL provides them with a foundational, highly liquid, yield-generating underlying asset.

Ondo is a retail (or professional retail) channel: Ondo acts as a distributor. It procures BUIDL as "raw material," packages it with other products, adds its own services (such as lower investment thresholds, more convenient user interfaces, cross-chain functionality, etc.), and then sells it to a broader customer base that still needs to meet accredited investor standards.

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 targeting 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, thereby protecting investor assets in extreme situations.
Underlying Assets: Its collateral consists of a portfolio of short-term U.S. Treasury bonds and bank demand deposits.
Over-Collateralization: The portfolio is over-collateralized, with a previously mentioned 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 the funds are processed.
Transfer Restrictions (“40-50 Day Lock-Up Period”): This is the most critical compliance design of USDY. To comply with the Regulation S exemption 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 ends, the tokens become freely transferable on-chain.
Redemption: USDY can only be redeemed for U.S. dollars via wire transfer, and the funds must be sent to a non-U.S. bank account.

Similar to OUSG, the standard version of USDY is an accumulating token, with its value increasing as yields grow. Ondo also offers a rebasing version rUSDY to cater to users who prefer a stable price of $1 and receive yields by obtaining additional tokens.

If OUSG is a compliance product set up by Ondo for institutional investors with strict entry "firewalls," then USDY is its primary tool for penetrating the broader DeFi ecosystem. Its native deployments 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 "currency Lego." Ondo is actively promoting USDY as a reserve asset for decentralized autonomous organizations (DAOs) like Arbitrum and MakerDAO, using it for lending and payment scenarios. Although the compliance-driven 40-day lock-up period introduces some usage friction, its strategic goal is clear: to make USDY a ubiquitous, yield-generating quality collateral asset throughout the DeFi world.

2.3 Product Comparison and Strategic Intent

To clearly articulate the different strategic positioning of Ondo's two flagship products, the following table compares their key features.

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 yields 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 strategic discipline of the Ondo team and their realistic judgment of the market.

In the on-chain user's mental model, the differences between tokenized money market funds (MMF) and tokenized short-term Treasury bill products (like OUSG) may not be significant, as both serve the core need for simple, secure returns. Continuing to advance OMMF could dilute its marketing resources and liquidity, with limited marginal benefits. The decisive abandonment of this product line indicates that Ondo is not blindly expanding but is continuously assessing the fit between products and the market, demonstrating the ability to "cut off an arm to survive."

This strategic clarity and execution discipline is a positive signal for its long-term development potential.

3. Technology Stack: Building the Track for "Wall Street 2.0"

3.1 Core Protocols: Empowering On-Chain Utility

Ondo has developed a series of protocols aimed at providing on-chain utility for its RWA products and laying the foundation 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 support both permissionless tokens like USDC and permissioned RWA tokens like OUSG as collateral simultaneously. To achieve this, Flux introduces a whitelisting mechanism, allowing only addresses that pass compliance checks to liquidate positions in restricted assets like OUSG, thus creating a "permissioned DeFi" environment. Governance of the protocol belongs to 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 thousands of publicly traded securities (including stocks, bonds, and ETFs) and bring them on-chain. The platform has launched on Solana, targeting 24/7 trading services and deep integration with Solana's DeFi ecosystem. Its target audience is 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 using OUSG as a shared liquidity layer across issuers. This design elevates OUSG's positioning from a mere investment product to a core market infrastructure level, indicating Ondo's intention 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 it is building. This is a public, proof-of-stake Layer 1 blockchain designed specifically for institutional-grade RWA.

Architectural Design and Innovations:

RWA Staking: Unlike traditional PoS chains that can only stake native tokens, Ondo Chain allows validators to stake RWAs (such as OUSG or tokens issued by Ondo GM) to secure the network. This design aims to reduce reliance on high-volatility crypto assets for network security.
Permissioned Validator Nodes: Validators on 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 network's compliance level.
Enshrined Oracles: Validators will natively and securely publish key off-chain data, such as asset prices, on-chain through a consensus mechanism, eliminating the need to rely on third-party oracle services for core functions, thereby reducing systemic risk and costs.
Gas Payment in RWA: Ondo Chain will allow users to pay transaction fees (Gas fees) using RWA tokens, which is a key usability improvement for institutions that wish to operate on-chain but are limited to holding specific assets.

Ondo believes that general public chains are not optimized for regulated securities. These securities have complex requirements in compliance, corporate actions (like stock splits), and identity verification, which existing blockchains cannot adequately meet. The birth of Ondo Chain is aimed at addressing these specific issues from the ground up.

The development of Ondo Chain reveals the company's ultimate strategy: vertical integration.

Ondo is not satisfied with merely building applications on other public chains but is committed to controlling the entire technology stack from asset tokenization (OUSG, USDY, GM) to lending/trading layers (Flux, GM platform) and down to the underlying settlement layer (Ondo Chain). This vertical integration, once successful, will grant Ondo significant market control, reduce dependence on external protocols, and enable it to capture value at every stage of the value chain. This is undoubtedly a high-risk but equally high-reward grand strategy.

3.3 Interoperability and Security

Cross-Chain Strategy: Ondo has achieved 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 every supported chain, effectively preventing liquidity fragmentation issues.

Security Status and Audit Findings: Ondo places a high priority on security, ensuring the robustness of its smart contracts through regular third-party code audits (conducted by organizations such as 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 particular chain in the bridging contract, potential permanent loss of funds for users using account abstraction wallets when bridging assets, the possibility of two different transactions from different source chains generating the same transaction hash disrupting the approval process, and the inability of administrators 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 aiming to connect 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 Custody and Financial Service Providers: This is the institutional safeguard for 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), as well as Zodia Custody and Komainu (crypto asset custody). This network forms the backbone of its institutional-grade 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 the accessibility and network effects of 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: This serves as the bridge connecting various islands. Axelar and LayerZero provide the 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 that spans TradFi and DeFi is extremely challenging. Each partnership with institutions like BlackRock, Coinbase, or NAV Consulting represents a long and rigorous process of due diligence, legal compliance, and technical integration.

This network provides Ondo with a mark 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 the 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 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 linear release.

Before the DAO vote on January 18, 2024, the transfer of ONDO tokens is restricted. After unlocking, most of the tokens allocated to investors and the team will still be subject to strict, multi-year linear release schedules. For example, 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 decision-making for the Ondo DAO, which is responsible for managing protocols like Flux Finance. Token holders can vote on proposals for protocol upgrades, fee structure adjustments, and the addition of collateral assets.

As the Ondo ecosystem develops, the utility of the ONDO token is expected to expand. It is highly likely to become the core governance token for Ondo Chain, used for electing validators and determining eligible staking assets. Additionally, the market generally anticipates that ONDO will eventually be used for network security staking to earn rewards, or to enjoy fee discounts within the ecosystem, and even participate 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 rights, and users of 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 at present (one report estimates annual revenue to be less than $10 million), the ONDO token maintains a fully diluted valuation (FDV) of several billion dollars.

This phenomenon suggests that the market's pricing of ONDO is not based on its current cash flow or direct utility.

Instead, 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 like 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 the ONDO token highly sensitive to changes in market narratives and the execution capability of the team’s roadmap.

Its high FDV and the large supply of yet-to-be-unlocked tokens present significant valuation risks — if execution falls short of expectations or if the market narrative shifts, the token price 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 is the primary threat faced by Ondo. 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, making execution highly challenging. The company adopts a phased rollout strategy, supported by an experienced team and strong venture capital backing to ensure development. However, this remains its highest internal risk.
Competitive Risk: Traditional financial giants are fully capable of building their own RWA ecosystems, thereby bypassing intermediaries like Ondo. Ondo is attempting to establish strong network effects through its extensive partner ecosystem and to gain a first-mover advantage in building a compliant on-chain financial center.
Valuation Risk: As mentioned earlier, the high valuation of the token is entirely based on optimistic expectations for the future. A series of measures proposed in the current DAO vote are gradually setting a long-term token release schedule for insiders and early investors, aiming to ensure long-term alignment of interests and prevent premature sell-offs, thereby stabilizing market expectations to some extent.

6.2 Strategic Outlook

Ondo Finance has successfully positioned itself as a top competitor in the RWA space with its unique strategy of prioritizing institutional trust and regulatory compliance. Its outstanding leadership team, strong partner network, and meticulous product structure collectively provide a solid foundation.

However, the project is at a critical crossroads. Its current success is primarily built on a few relatively simple but well-executed tokenized Treasury products. Its multi-billion dollar valuation bets on a more ambitious future: the creation of a new, vertically integrated on-chain financial infrastructure layer.

The ultimate success or failure of Ondo will depend on its ability to bridge the execution gap from being a successful asset manager to becoming 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 — to occupy a central position in the future financial system — are equally significant.

References

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 from DePINone Labs are for informational and educational purposes only and do not constitute any investment advice.

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