Author:137 Labs

1. Starting Point of the Problem: Why Have Stock Perpetuals Never Done Well?

If we look back at the development path of DeFi over the past few years, we can observe a clear phenomenon of differentiation: the derivatives market for crypto-native assets (BTC, ETH) has become quite mature, while derivatives related to real-world assets (RWA) remain stuck at the "experimental stage."

Stock perpetual contracts are a typical case.

From the demand side, this market is actually very clear: global users want to participate in U.S. stock trading with lower barriers and higher efficiency, while using tools like leverage and hedging for risk management. However, from the supply side, whether it was the early synthetic asset protocols (e.g., Synthetix) or later on-chain order book or AMM models, none have truly solved the core issue.

These attempts often manage to provide price exposure in the early stages but struggle to support ongoing trading, eventually falling into a cycle of liquidity depletion, widening slippage, and user attrition.

Meanwhile, tokenized stocks are rapidly developing as another path. According to mainstream media reports, these assets already possess the advantages of around-the-clock trading and instant settlement, yet their market scale remains limited, and they mostly stay at the level of "holding tools" rather than being part of a complete financial system.

Therefore, the key question is not "Is there anyone who wants to trade stocks?" but rather:

Why can't these assets form a self-sustaining, continuously expanding market structure?

In other words, what is truly missing is not the products but the underlying mechanisms that support their operation.

2. Current Situation: Structural Defects in DeFi and Tokenized Stocks

If we further dissect the existing system, we can find that the problems concentrate on two levels: collateral structure and liquidity structure.

First, in the DeFi derivatives system, the collateral is highly singular. Mainstream protocols rely almost entirely on stablecoins as margin, which means that all trading activities must be completed using stablecoins as intermediaries. If users hold other assets, whether ETH or tokenized stocks, they must first convert them to stablecoins to participate in derivatives trading.

This design was reasonable in the early days because stablecoins offer price stability and ease of settlement, but as the variety of assets increases, it gradually becomes a structural constraint. Relationships between assets cannot be established directly, resulting in the entire system exhibiting a characteristic of "isolation."

Secondly, while tokenized stocks have made progress in asset mapping, their financial functions remain extremely limited. They can be held, transferred, and even used for simple lending in some scenarios, but lack more complex uses, such as participating in derivatives trading as efficient collateral or playing a role in multi-asset portfolios.

The deeper issue lies in liquidity. Most tokenized stock projects attempt to "rebuild a market" on-chain, providing trading depth through AMM or synthetic order books. However, this method is inherently limited by the scale of on-chain capital and cannot compete with the liquidity of traditional exchanges, leading to price deviation, slippage, and trading cost issues.

Therefore, the core defects of the current system can be summarized as:

Assets are tokenized, but they cannot form effective financial relationships between each other, and the market also lacks sufficient liquidity support.

3. What Ondo Perps Did: Triple Structural Innovation

In this context, the emergence of Ondo Perps is not merely about providing a new trading platform; it attempts to simultaneously reconstruct collateral logic, asset relationships, and liquidity sources.

First, it introduces a key change: allowing tokenized stocks to be used directly as collateral. This change seems like just a parameter adjustment, but it fundamentally alters the flow of funds within the entire system. Users no longer need to liquidate their assets into stablecoins but can directly leverage their existing positions for operations or hedging.

This mechanism does not just enhance efficiency; more importantly, it changes the nature of the assets. Stocks are no longer just "income assets" but become "credit foundations" that can support other risk exposures. In a financial context, this means the assets begin to possess "collateral attributes."

Secondly, Ondo introduces the concept of cross-asset margin. Traditional DeFi protocols typically adopt an isolated margin model, calculating risk independently for each position, while Ondo treats the entire asset portfolio as a whole. This design is closer to portfolio margin in traditional finance, allowing different assets to hedge and support one another.

The underlying change is structural: risk is no longer calculated on a single asset basis but on a combination basis. As a result, capital utilization rates are significantly improved, while more complex risk transmission paths are introduced.

Thirdly, and most crucially, is the change in the liquidity model. Ondo does not attempt to build liquidity from scratch on-chain; rather, it connects the on-chain market and traditional exchanges through the issuance and redemption mechanism of tokenized stocks. This means that price discovery and liquidity depth can be directly inherited from Nasdaq and NYSE, rather than relying on limited on-chain liquidity pools.

If this mechanism can operate stably, then on-chain trading will no longer be limited by TVL but can access a market size of trillions of dollars.

4. Essence: What Is It Actually Doing?

At a higher level, the significance of Ondo Perps does not lie in "improving the trading experience" but rather in redefining the basic structure of the financial system.

Traditional DeFi resembles a "collection of trading tools," where users can switch between different protocols to borrow, trade, stake, and perform other operations. However, these operations are independent of each other, lacking a unified risk management and asset perspective.

In contrast, Ondo's direction is closer to the main brokerage system in traditional finance. In this system, users are not operating individual products but managing an entire balance sheet. All assets and liabilities are included within a unified risk framework and dynamically adjusted through portfolio margin.

Therefore, Ondo can be understood as a combination of three functions:

· A multi-asset collateral system

· A portfolio risk management engine

· A clearing layer connecting on-chain and traditional markets

From this perspective, it resembles a "financial account system" rather than a standalone trading platform.

5. Why This Is Important: Three Layers of Impact

If this model can be implemented, its impact will not be limited to a single protocol but could change the entire development path of DeFi.

First, there is the enhancement of capital efficiency. Assets can participate in various financial activities without needing conversion, reducing intermediate steps and transaction costs while increasing capital turnover speeds. In high-frequency trading and hedging scenarios, this difference will be magnified further.

Secondly, the boundaries of assets disappear. In the past, crypto, stocks, bonds, and other assets belonged to different systems, while in the Ondo model, they can coexist in the same account and interact with one another. This integration will make asset allocation more flexible and may also give rise to new strategies and products.

Thirdly, the user structure will change. As the system's complexity increases, ordinary users may find it difficult to fully utilize these functions, while institutional investors and professional traders will become the main participants. This indicates that DeFi is gradually evolving toward "institutionalization," and its market behavior will become closer to traditional finance.

6. Risks and Uncertainties: The More Complex the Structure, the More Concealed the Risks

Despite the bright prospects, this model also introduces new dimensions of risk.

The core uncertainty remains liquidity. If the on-chain market cannot reliably access traditional exchange liquidity, then all mechanisms based on this will be affected, and price deviations and settlement risks will quickly magnify.

Secondly, there is the complexity of the settlement mechanism. In a multi-asset, cross-market environment, the risk transmission paths become more intricate. Price fluctuations in one asset may affect another through collateral relationships, thereby triggering a chain reaction. This systemic risk has not been sufficiently validated in DeFi.

Lastly, there are regulatory issues. Tokenized stocks involve securities attributes, and their compliance varies across different jurisdictions. If the regulatory environment changes, it could directly impact the sustainability of asset issuance and trading.

7. Conclusion: Paradigm Upgrade or Complex Packaging?

In summary, the core of Ondo Perps is not to launch a new type of derivative but to attempt to construct a new financial structure, where assets can mutually support, price, and settle within a unified system.

The success of this attempt hinges on two key factors: whether liquidity can truly connect to real markets, and whether the risk system can maintain stability in a complex environment.

Therefore, a relatively clear judgment can be drawn:

If the liquidity model holds and risk control can withstand market fluctuations, then Ondo could potentially become a vital part of on-chain financial infrastructure; conversely, if these premises cannot be realized, it may ultimately remain just a derivative platform with more complex functionality but fundamentally similar essence.

From a broader perspective, the significance of this attempt may lie in its positing of a more fundamental question:

When different types of assets can mutually serve as collateral and participate in a unified market, do the boundaries of "currency" and "assets" in the traditional sense still exist?

This may be the fundamental proposition that Ondo is truly addressing.