Original Article Title: "In-Depth Research Report | Ondo Finance: How to Achieve 'Wall Street 2.0'?"
Original Source: DePINone Labs

Abstract

Ondo Finance has become a key player in the Real-World Asset (RWA) tokenization space, 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, technical roadmap, and the implementation of its RWA products.

Ondo's strategic foundation is the "compliance-first" approach laid by its team with backgrounds from top financial institutions like Goldman Sachs. This traditional finance DNA deeply influences its product design, partnership selection, and regulatory communication strategy, earning trust from industry giants like BlackRock and Morgan Stanley. The company operates on a dual-track business model, managing both an asset management division (issuing tokenized products like OUSG and USDY) and a technology division (developing protocols and infrastructure like Flux Finance, Ondo Global Markets, and Ondo Chain).

Its core RWA products are meticulously designed to cater to different market needs. OUSG is a tokenized U.S. Treasury bill fund for accredited U.S. investors, deeply integrated with BlackRock's BUIDL fund to enable 24/7 instant purchase and redemption, solving the pain point of traditional finance settlement delays. USDY, on the other hand, is an interest-bearing token backed by U.S. Treasuries and bank deposits for non-U.S. investors, designed to be a widely used, composable collateral in the DeFi ecosystem.

On the technical front, Ondo aspires to be more than just 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 RWAs. The chain plans to incorporate innovative mechanisms such as RWA collateralization, permissioned validator nodes, and native oracles to address the current challenges faced by public chains in handling regulated securities.

Ondo's competitive moat lies not only in its technology but also in its extensive and deep-rooted network of partners covering asset management, custody, compliance, and liquidity, among other areas. However, the company also faces significant challenges, including a blurred token value capture mechanism, a valuation that is high relative to current revenue, intense competition from both traditional financial giants and Web3 startups, and significant regulatory and enforcement risks.

In summary, Ondo Finance's market value is not based on its current cash flow, but on the market's bullish option on its successful realization of the grand vision of "Wall Street 2.0." Whether it can transition from a successful asset management company to an infrastructure provider for the future decentralized finance market will be key to determining its long-term value.

1. Ondo Finance Blueprint

1.1 Mission: Bridging the DeFi and TradFi Worlds

Ondo Finance's core mission is clear and ambitious: by bridging the gap between traditional finance (TradFi) and decentralized finance (DeFi), it aims to make institutional-grade financial products and services accessible to everyone. This vision is succinctly summarized as building "Wall Street 2.0," intending to leverage blockchain technology to transform the financial market's infrastructure and accessibility.

The company's strategic foundation is deeply rooted in the background of its leadership team. Co-founders Nathan Allman and Pinku Surana both have work experience at top Wall Street institutions such as Goldman Sachs. This is not merely a résumé embellishment but a strategic asset at the core. This background explains why Ondo has placed extreme emphasis on compliance from the outset and has made it a primary differentiating advantage. The company is among the first to demonstrate rigorous legal compliance in DeFi projects, with the on-chain and off-chain movement of user assets managed by reputable 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 dialogue. For example, appointing former chairman of the U.S. House Financial Services Committee Patrick McHenry as vice-chair of the advisory council and meeting with the U.S. Securities and Exchange Commission (SEC) to discuss the regulatory framework for tokenized securities. These efforts indicate that Ondo's strategy is first to build a "moat" based on trust and compliance, and then to solidify its technological advantage. Strong capital support also confirms the market's recognition of its team and vision, with the company successfully raising $46 million from top-tier investment firms such as Founders Fund, Pantera Capital, and Coinbase Ventures.

1.2 Business Model: Dual Focus on Asset Manager and Technology Provider

Ondo Finance's organizational structure is unique, divided into two interdependent core departments, forming its dual-focus 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 institution-focused Ondo Short-Term US Government Bond Fund (OUSG) and the globally retail-focused US Dollar Yield (USDY).

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 accomplishments include the decentralized lending protocol Flux Finance and the Layer 1 blockchain Ondo Chain designed for RWAs.

This structure enables it to generate revenue through various channels:

· Asset Management Fee: For the OUSG product, Ondo charges institutional clients a 0.15% management fee (currently waived until July 1, 2025) and a 0.15% fund operating fee.

· Yield Spread: For the USDY product, Ondo retains approximately a 0.5% spread from the income generated by the underlying assets as revenue.

· Future Potential Revenue: As the ecosystem matures, transaction fees on the Ondo Chain or licensed use of its technology stack could become new revenue sources.

Through this pattern of analysis, it can be observed that the current asset management business core-focused on RWAs has strategic significance far beyond fee collection.

These high-quality, income-generating tokenized assets are more like "bait" to attract capital and users. Through OUSG and USDY, Ondo has successfully attracted a significant Total Value Locked (TVL) and users, laying the foundation for liquidity and demand to build a larger technical ecosystem—namely, Ondo Chain and Ondo Global Markets.

The currently relatively modest 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 taken a leading position in the RWA field. As of early 2025, Ondo ranks in the top three in the tokenized RWA space, with its TVL surpassing the $1 billion mark.

Of particular note, in terms of the number of holders of tokenized US Treasuries, Ondo holds over 90% market share, largely due to the openness of its USDY product to non-US retail investors.

Despite these impressive achievements, Ondo still faces fierce competition from different fronts:

· Native crypto competitors: Hashnote (USYC) and Securitize are its main rivals in the Web3 space. In particular, Hashnote has actively competed for market share by offering highly attractive yields.

· Traditional financial giants: Institutions such as BlackRock (BUIDL) and Franklin Templeton (FOBXX/BENJI) are both Ondo's partners and its most powerful potential competitors. They control the source of RWAs—the issuance of underlying assets—and have begun to launch their own tokenized funds.

To provide a clearer overview of the competitive landscape, the table below compares key players in the tokenized sovereign debt market.

Competitive Landscape in the Tokenized Sovereign Debt Market

Data Source: rwa.xyz. TVL and market share are dynamic data, and the approximate values for the reporting period are cited here for illustration purposes.

2. Ondo's RWA Product Matrix

2.1 OUSG: Gateway to On-Chain Government Bonds

OUSG (Ondo Short-Term US Government Treasuries) is a tokenized fund that provides investors with exposure to short-term US government bonds. The product is designed for Qualified Purchasers and Accredited Investors, including investors within the US.

Strategic Iteration Path

The underlying assets of OUSG have undergone a crucial strategic iteration, which has had a profound impact on 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 that when users redeem OUSG, there is a significant time delay, which is a major friction point in the 24/7 operation of the crypto market.

· Strategic Transformation: In March 2024, with BlackRock launching its first tokenized fund BUIDL, Ondo took swift action and strategically transferred $95 million of OUSG's underlying assets to BUIDL. This move was pivotal as it allowed OUSG to leverage BUIDL's on-chain capabilities, enabling 24/7/365 instant minting and redemption, effectively resolving the settlement delay pain point.

· Current Portfolio: Today, OUSG's investment portfolio has evolved into a diversified tokenized fund portfolio, including BlackRock's BUIDL, Franklin Templeton's BENJI, WisdomTree's WTGXX, among others, complemented by cash equivalents to ensure liquidity.

Legal and Operational Structure

OUSG's operations are built on a fully institutional-grade, multi-party participation framework.

· Legal Entity: The fund's legal structure is a Delaware limited partnership named Ondo I LP. Investors become limited partners of the fund by purchasing OUSG tokens.

· Governance Structure: The fund's general partner 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 fund management and investment decisions.

· Asset Custody Chain: The custody path of assets is clear and secure. Investors' USDC is first deposited into Ondo's account on Coinbase. These funds are then used to purchase underlying assets such as BUIDL. Traditional securities (like 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 custody institutions 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 financial report publication, ensuring operational transparency and independence.

User Workflow

1. Eligibility Verification and Account Opening: Investors must meet the standards of Accredited Investors or Qualified Purchasers and pass KYC/AML (Know Your Customer/Anti-Money Laundering) checks.

2. Minting (Investment): Users connect their wallet, deposit USDC or PYUSD. The smart contract calculates the amount 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 amount for immediate trading is $5,000.

3. Redemption: Users initiate a redemption request. The amount of OUSG tokens they hold multiplied by the current NAV determines the USDC value to be returned. The entire process can be conducted 24/7.

Earnings and Fee Structure

· Earnings: OUSG's Annual Percentage Yield (APY), e.g., 4.09%, is derived from the interest generated by the U.S. Treasury Fund it invests in. Earnings are reflected through the accumulated growth in the OUSG token price (i.e., NAV). Additionally, Ondo also offers a "rebasing" version called rOUSG, where the price is pegged to $1, and earnings are distributed to holders in the form of daily minted new tokens.

· Fees: The fund charges a 0.15% management fee (waived until July 1, 2025) and a maximum of 0.15% fund operational fee.

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

The Difference and Connection with BUIDL

At first glance, OUSG and BUIDL both appear to be tokenized products based on national debt. In reality, as can be seen from the above description, they have many differences.

Simply put, OUSG is a "fund of funds" managed by Ondo Finance, which pools investors' funds to invest in a basket of tokenized US Treasury bond funds, including BlackRock's BUIDL.

Their relationship is symbiotic: Ondo is a major client of BlackRock's BUIDL and an important distribution channel; whereas BUIDL provides the key technological infrastructure for OUSG to achieve its core functionality—24/7 instant creation and redemption.

Key Difference 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 who need to manage their substantial on-chain treasury. BUIDL provides them with a foundational, highly liquid, yield-generating underlying asset.

Ondo is a retail (or professional retail) channel: Ondo plays the role of a distributor. It procures BUIDL as the "raw material," packages it with other products, adds its own services (such as lower investment thresholds, a more user-friendly interface, cross-chain functionalities, etc.), and then sells it to a wider but still qualified investor audience.

2.2 USDY: A Global Interest-Bearing Stablecoin Alternative

USDY (Ondo US Dollar Yield) is a tokenized note collateralized by short-term US Treasury bonds and bank current deposits. It is designed as an interest-bearing stablecoin alternative primarily targeting non-US individuals and institutional investors.

Structure and Collateral

· Legal Structure: USDY is issued as a debt instrument by Ondo USDY LLC, a bankruptcy-remote entity in Delaware. This structure aims to legally separate the assets supporting USDY from Ondo Finance's balance sheet, thereby protecting investor assets in extreme circumstances.

· Underlying Asset: Its collateral is a portfolio consisting of short-term US Treasuries and bank savings deposits.

· Overcollateralization: The portfolio operates with overcollateralization, with a mentioned 3% buffer. For transparency, Ondo daily publishes reserve proof provided by a third party.

Full Process for Non-US Investors

1. Eligibility Verification and Account Opening: Limited to non-US individuals or entities who have completed the KYC/AML process.

2. Investment: Users can invest through USDC, USDT, or USD wire transfer. Interest starts accruing once the funds are processed.

3. Transfer Restriction ("40–50 Day Lockup Period"): This is a key compliance design of USDY. To comply with the Regulation S exemption under US 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 lockup period, the tokens become freely transferable on-chain.

4. Redemption: USDY can only be redeemed via wire transfer into a non-US bank account.

Similar to OUSG, the standard version of USDY is an accrual-based token, with its value increasing with earnings growth. Ondo also offers the rebase version of rUSDY to cater to users preferring a $1 stable price and earning additional tokens.

If OUSG is Ondo's compliance product tailored for institutional investors with a strict access "firewall," then USDY is a key tool penetrating the broad DeFi ecosystem. Its native deployments on multiple mainstream blockchains such as Ethereum, Solana, Arbitrum, Sui, and the fully permissionless transferability post-lockup make it an ideal composable "monetary Lego." Ondo is actively pushing for USDY to become a reserve asset for decentralized autonomous organizations (DAOs) like Arbitrum and MakerDAO, using it for lending and payment scenarios. Despite the compliance-driven 40-day lockup introducing some friction, its strategic goal is evident: to make USDY a ubiquitous, yield-generating quality collateral asset across the entire DeFi landscape.

2.3 Product Comparison and Strategic Intent

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

Ondo Finance RWA Product Comparison (OUSG vs. USDY)

2.4 OMMF: A Strategic Contraction

Product Launch: Ondo had previously announced the launch of OMMF (Ondo US Money Markets) in April 2023, a tokenized money market fund designed to maintain a stable price of $1 and distribute earnings through minting new tokens.

Product Withdrawal: However, according to a third-party risk assessment report in April 2024, Ondo "withdraw the plan for the tokenized money market fund ($OMMF)."

The quiet withdrawal of OMMF, in contrast to the high-profile launch of other products, underscores the strategic discipline of the Ondo team and their realistic assessment of the market.

In the mental model of on-chain users, the difference between a tokenized money market fund (MMF) and a tokenized Treasury bill (T-Bill) product (such as OUSG) may not be significant, as both serve the core need for simple, secure yield. Continuing to push OMMF may dilute its marketing resources and liquidity, with limited marginal benefits. The resolute abandonment of this product line shows that Ondo is not expanding blindly but is continuously evaluating the fit of its products with the market and has the ability to "cut its losses."

This strategic clarity and execution discipline are positive signals for its long-term development potential.

3. Technology Stack: Building the Path to "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 a broader financial market.

· Flux Finance: This is a decentralized lending protocol based on a fork of Compound V2. Its core innovation lies in its ability to support both permissionless tokens like USDC and permissioned RWA tokens like OUSG as collateral. To achieve this, Flux introduces a whitelist mechanism where only addresses that have passed compliance checks can liquidate positions of restricted assets like OUSG, creating a "permissioned DeFi" environment. Governance of this protocol belongs to the Ondo DAO, with decisions made collectively by ONDO token holders.

· Ondo Global Markets (GM): This is one of Ondo's most ambitious platforms, aimed at tokenizing thousands of publicly tradable securities (including stocks, bonds, and ETFs) and bringing them on-chain. The platform has launched on Solana with the goal of providing 24/7 trading and deep integration with Solana's DeFi ecosystem. Its services target non-U.S. investors. Technically, the platform utilizes a dynamic bonding curve and integration with decentralized exchanges (DEXes) like Meteora to provide initial asset liquidity.

· Nexus Asset Issuance Protocol: This protocol aims to provide instant liquidity for third-party issued tokenized sovereign debt by using OUSG as a cross-issuance shared liquidity layer. This design elevates OUSG's positioning from a mere investment product to a core market infrastructure level, demonstrating 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 RWAs.

Architectural Design and Innovation:

· 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 on Ondo GM) to secure the network. This design aims to reduce network security reliance on highly volatile crypto assets.

· Licensed Validation Nodes: Validators on Ondo Chain will consist of regulated financial institutions (potential disclosed participants include Franklin Templeton, Wellington, WisdomTree, etc.). This design aims to prevent malicious behaviors like front-running and fundamentally elevate the network's compliance standards.

· Native Oracles: Validators will natively and securely publish key on-chain data like asset prices through a consensus mechanism, eliminating the need for third-party oracle services to execute core functions and reducing systemic risks and costs.

· Paying Gas with RWA: Ondo Chain will allow users to pay transaction fees (Gas fee) 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-purpose blockchains are not optimized for regulated securities. These securities have complex requirements related to compliance, corporate actions (such as stock splits), identity verification, and existing blockchains do not address these needs well. The creation of Ondo Chain is meant to address these specific issues from the ground up.

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

Ondo is not content with just building applications on other public blockchains, but is committed to owning the entire technology stack from asset tokenization (OUSG, USDY, GM), to lending/trading layers (Flux, GM Platform), to the underlying settlement layer (Ondo Chain). Once this vertical integration is successful, it will give Ondo significant market control, reduce reliance on external protocols, and enable it to capture value at every link in the value chain. This is undoubtedly a highly risky but equally high-reward grand strategy.

3.3 Interoperability and Security

· Cross-chain Strategy: Ondo has achieved native token interoperability through its Ondo Bridge. The bridge utilizes a "burn-and-mint" mechanism, supported by leading interoperability protocols such as Axelar and LayerZero. This approach avoids the security risks inherent in the traditional "wrapped assets" model, ensuring that USDY is a native asset on each supported chain, effectively preventing liquidity fragmentation.

· Security Posture and Audit Findings: Ondo places a strong emphasis on security, ensuring the robustness of its smart contracts through regular third-party code audits (conducted by organizations like Code4rena, NetherMind, Zokyo) and a public bug bounty program. In September 2023, the Code4rena audit report identified 4 medium-risk vulnerabilities, mentioning issues such as the inability to remove or clear support for a chain from the bridging contract, the potential for permanent loss of funds when bridging assets using an account-abstracted wallet, the possibility of two different transactions from different source chains generating the same transaction hash disrupting the approval flow, and the inability of the administrator to burn tokens from blacklisted addresses.

4. Ecosystem and Partnerships

4.1 Partner Network Map

Ondo has successfully built a multi-layered partner ecosystem spanning TradFi and DeFi, which is crucial for a company aiming to connect both worlds.

· Traditional Financial Asset Managers and Banks: This forms the foundation of Ondo's legitimacy and asset quality. Partners include BlackRock, Franklin Templeton, Wellington Management, WisdomTree, Morgan Stanley, JPMorgan, ABN AMRO, and others. 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 provides the institutional safeguard for Ondo's operations. Partners include Coinbase (crypto asset custody and brokerage), BNY Mellon (BUIDL Fund custody bank), Clear Street (ETF custody), NAV Consulting (fund administrator), 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 serves as the distribution channel for Ondo's products. Ondo's products have been deployed on various mainstream public blockchains such as Ethereum, Solana, Polygon, Arbitrum, Sui, Aptos, Cosmos (through Noble), and the XRP Ledger. The widespread deployment ensures the accessibility and network effects of its products.

· DeFi Protocols: This embodies the on-chain utility of Ondo's products. Partners include MakerDAO and Arbitrum DAO (using Ondo products as reserve assets), Pendle, Drift, Helio, Sphere, among others (for product integrations). These partnerships bring composability to 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 bridges.

4.2 Strategic Value Analysis

Ondo's partner network is not only the foundation of its business operations but also a powerful, non-technical moat. In the Web3 world, code can be forked, but rebuilding such a deep, multi-layered trust network spanning TradFi and DeFi is extremely challenging. Each partnership with institutions like BlackRock, Coinbase, or NAV Consulting represents a long and rigorous due diligence, legal compliance, and technical integration process.

This network provides Ondo with an "institutional endorsement," 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 trust and relationship barriers.

From this perspective, Ondo's ecosystem itself may be more valuable than its current codebase and harder to replicate.

5. ONDO Tokenomics: Governance, Value, and Future Potential

5.1 Token Distribution and Release Mechanism

Supply and Inflation: The total supply of ONDO tokens is fixed at 10 billion, with no planned inflation mechanism.

Distribution Structure: The token allocation is designed 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% unlocked at Token Generation Event (TGE) and the rest released gradually over 5 years.

· Protocol Development (Core Contributors/Team): 33% (3.3 billion tokens)

· Private Sale Rounds (Seed/Series A): Approximately 12.9% (1.29 billion tokens). 1-year lockup + 48-month linear release.

· Community Sale (via CoinList): Approximately 2% (1.9888 billion tokens). Around 90% unlocked at TGE, 1-year lockup + 6/18-month linear release.

Until January 18, 2024, the transferability of ONDO tokens is restricted pending a DAO vote. Post unlock, most of the tokens allocated to investors and the team remain subject to strict, multi-year linear release schedules. For instance, tokens held by private sale investors typically have a 1-year lockup followed by a 48-month linear release.

5.2 Governance Utility

Currently, the primary and most explicit utility of the ONDO token is governance. Holders can participate in the decisions of the Ondo DAO, which is responsible for managing protocols such as Flux Finance. Token holders can vote on proposals for protocol upgrades, fee structure adjustments, addition of collateral assets, and more.

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 of the Ondo Chain, used for electing validators and determining eligible staking assets. Furthermore, the market broadly anticipates that ONDO could be used for network security staking in the future, allowing holders to earn rewards, or to enjoy fee discounts within the ecosystem, or even participate in some form of value feedback mechanism (such as buyback and burn). However, these mechanisms have not been formally implemented at this time.

5.3 Critical Analysis of Value Capture

Several analysis reports point out that the ONDO token currently lacks a strong and direct value capture mechanism. Its utility is primarily limited to governance, and users of Ondo's RWA products (such as OUSG or USDY) do not need to hold or use the ONDO token.

Although the direct revenue generated by the protocol is currently relatively limited (one report estimates annual revenue to be less than $10 million), the ONDO token maintains a fully diluted valuation in the billions of dollars.

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

Instead, the market sees it as a call option on a grand narrative of "Wall Street 2.0." Its price reflects a collective belief in the market that Ondo will successfully launch disruptive infrastructure such as the Ondo Chain and Global Markets, and that the ONDO token will ultimately be able to capture significant value from this vast ecosystem (e.g., through staking rewards, transaction fee sharing, etc.). This makes the value of the ONDO token highly sensitive to changes in market narratives and the team's ability to execute the roadmap.

Its high FDV and a large amount of still-locked token supply pose a significant valuation risk — if execution falls short of expectations, or if the market narrative shifts, the token price could face a sharp correction.

6. Comprehensive Analysis and Outlook

6.1 Key Risks and Mitigation Measures

· Regulatory Risk: The legal framework for security tokenization is still evolving, presenting the most significant threat to Ondo. Ondo actively manages this risk by engaging in proactive communication with regulatory bodies, 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 a very high execution difficulty. The company adopts a phased rollout strategy, backed by an experienced team and strong venture capital support to safeguard development. However, this remains its top internal risk.

· Competition Risk: Traditional financial giants are fully capable of building their own RWA ecosystems, bypassing intermediaries like Ondo. Ondo is trying to establish a strong network effect through its extensive partner ecosystem and compete for a first-mover advantage in building a compliant chain-based financial hub.

· Valuation Risk: As mentioned earlier, the token's high valuation is entirely based on optimistic future expectations. The series of measures currently proposed by DAO voting progressively sets a long-term token release schedule for insiders and early investors, aiming to ensure long-term alignment of interests, prevent premature selling, and thereby stabilize 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 field. Its outstanding leadership team, strong partner network, and meticulous product structure have collectively built a solid foundation.

However, the project is at a critical juncture. Its current success is mainly built on a few relatively simple but well-executed tokenized sovereign debt products. Its multi-billion-dollar valuation is staked on a grander future: creating an entirely new, vertically integrated on-chain financial infrastructure layer.

Ondo's ultimate success or failure will depend on its ability to bridge the execution gap from a successful asset manager to a future provider of "Wall Street 2.0" infrastructure.

For sophisticated investors, Ondo offers a clear, though high-risk, exposure to the macro trend of institutions adopting public chain technology. While the road ahead is fraught with regulatory, competitive, and technological challenges, the potential rewards it pursues—occupying a core position in the future financial system—are equally enormous.

Partial References

1. Ondo Research—BlockBase Insights, https://insights.blockbase.co/ondo-research/

2. 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

3. 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/

4. What is Ondo Finance? Future of RWAs and DeFi—NFTevening, https://nftevening.com/what-is-ondo/

5. Final Report—Ondo (OUSG)—Particula, https://particula.io/wp-content/uploads/2024/06/Digital-Asset-Risk-Rating-Report-Ondo-OUSG-April-2024.pdf

6. Ondo Finance, Real-World Asset: Investor Guide, https://www.diadata.org/rwa-real-world-asset-map/ondo-finance/

7. 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

8. How Does Ondo Finance Work?—CanvasBusinessModel.com, https://canvasbusinessmodel.com/blogs/how-it-works/ondo-finance-how-it-works

9. 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

10. 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

11. Stablecoins: What is $USDY by Ondo Finance?—MyEtherWallet, https://www.myetherwallet.com/blog/stablecoins-what-is-usdy-by-ondo/

12. 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/

13. Introducing Ondo Chain: The Omnichain Network for RWAs, https://blog.ondo.finance/introducing-ondo-chain/

14. Ondo Finance and Axelar Integrate for Cross-Chain Tokenized Secure Notes, https://www.axelar.network/blog/ondo-finance-cross-chain-stablecoin

15. 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

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