In-depth Analysis of Ondo Finance: The On-Chain Practice of U.S. Treasury Bonds in Web3 Investment Banking

Written by: @longyeyouxin

Advisors: @CryptoScottETH, @ZouBlock

TL;DR

• Ondo Finance is a financial protocol focused on the RWA track, currently primarily engaged in tokenizing high-quality assets such as U.S. Treasury bonds and money market funds within a compliant framework for investment and trading by users on the blockchain.
• The RWA U.S. Treasury track that Ondo Finance operates in has seen a 6-fold increase in TVL over the past year, making it a major driving force in the RWA industry. Ondo Finance ranks third in TVL within this track, giving it a certain first-mover advantage.
• The future growth points for Ondo Finance lie in expanding the scale of existing products and launching other types of RWA products, with the development goal of becoming an important bridge connecting on-chain and off-chain.
• The main risk faced by Ondo Finance is intense market competition, as the RWA industry is vast and still in its infancy, with many strong institutions vying to enter and capture the market.
• The $ONDO token will unlock circulation in January 2024, and has seen significant price increases post-listing; however, aside from being used for DAO governance, there are currently no other practical use cases for the token, and its future usage scenarios remain unclear.
• Approximately 80% of the $ONDO token is still held by the project team, with an unclear distribution mechanism, posing significant centralization risks.

I. Project Overview

Ondo Finance is a decentralized institutional-grade financial protocol dedicated to leveraging blockchain technology to provide institutional-grade financial products and services, creating an open, permissionless, and decentralized investment bank.

Ondo's current core business is to bring low-risk, stable-yield, scalable fund products (such as U.S. Treasury bonds and money market funds) onto the blockchain, providing on-chain investors with an alternative to stablecoins and allowing holders, rather than issuers, to earn most of the underlying asset's returns.

1. Basic Project Information

2. Project Development History

At its inception, Ondo Finance focused on the DeFi track, but shifted its development direction to the RWA track at the end of 2022 and achieved good results in 2023. Key milestones in the project's development are as follows:

(1) March 2021: Company Founded, Focus on DeFi

Former Goldman Sachs employees Nathan Allman and Pinku Surana co-founded Ondo Finance Inc., initially positioning the company to introduce structured assets with good yields into the DeFi space.

In August 2021, Ondo launched its first product, Ondo Vaults—a structured finance protocol operating on Ethereum. This product allows investors to choose "enhanced returns" or "downside protection" when providing liquidity to decentralized exchanges like Uniswap.

(2) August 2021: Seed Round Financing

Pantera Capital led the round, with participation from Genesis, Digital Currency Group, CMS Holdings, CoinFund, Divergence Ventures, Stani Kulechov, Richard Ma, Christy Choi, and others. The round raised $4 million, with a token price of 1 ONDO = 0.0057 USD.

At this stage, Ondo described itself as "a protocol designed to allow DeFi traders to hedge and utilize risks according to their own preferences." Ondo allows users to initiate risk-isolated, fixed-income loans backed by digital assets. Both lenders and borrowers inject funds into Ondo's smart contract-executed "Vault," which offers two options: "fixed income" to reduce risk and "variable income" to maximize returns.

(3) Second Half of 2021: Launch of LaaS Service

Liquidity-as-a-Service (LaaS) helps token issuers enhance liquidity on decentralized exchanges. It pairs DAOs with underwriters (stablecoin issuers) to guide high-liquidity AMM trading pairs. DAOs provide governance tokens, underwriters provide stablecoins, and Ondo assists in establishing liquidity pools. The ultimate goal is to help DAOs build their own liquidity without relying on liquidity mining or market-making firms.

More than 10 DAOs, including NEAR, Synapse, and UMA, as well as underwriters like Fei, Frax, Terra, and Reflexer, participated in the program. Ondo provided over $210 million in total liquidity (TLP) between the community and LaaS Vault.

(4) April 2022: Series A Financing

Pantera Capital and Founders Fund led the round, with participation from Wintermute, Tiger Global Management, Steel Perlot, GoldenTree Asset Management, Flow Traders, Coinbase Ventures, and others. The round raised $20 million, with a token price of 1 ONDO = 0.0285 USD.

At this stage, Ondo described itself as "a protocol providing structured investment products built on decentralized exchanges." In addition to the "Vault" investments mentioned during the seed round in August 2021, Ondo also provided LaaS to DAOs at this stage.

(5) May 2022: ICO Financing

Ondo completed its ICO financing on the CoinList platform. It sold 3 million ONDO at a price of $0.03, with a lock-up period of 1 year and linear release over 18 months; it sold 17 million ONDO at a price of $0.055, with a lock-up period of 1 year and linear release over 6 months. The round raised $10.25 million, with the price for most public investors being 1 ONDO = 0.055 USD.

At this stage, Ondo described itself as "serving and connecting various stakeholders in the emerging DeFi ecosystem—including DAOs, institutions, and individuals." The project roadmap released by the Ondo team at that time is as follows:

(6) January-February 2023: Abandon Vaults and LaaS, Transition to RWA Track

With the compression of DeFi yields in 2022, the Ondo team decided to phase out Vaults and LaaS (collectively referred to as "Ondo V1") and focus on developing the next-generation protocol. Ondo V2, upon launch, included Ondo Funds and Flux Finance.

Ondo's positioning was modified to "building next-generation financial infrastructure to enhance market efficiency, transparency, and accessibility," and it successively launched two tokenized financial products, USDY and OUSG, transitioning into the RWA track.

(7) January 2024: ONDO Token Unlocks Circulation

Following a community vote, the ONDO token was unlocked for circulation on January 18, 2024, and saw significant price increases post-unlocking, briefly exceeding $0.3. Coinbase also announced that it would include ONDO in its listing roadmap.

3. Core Team Background

II. Business Model

Ondo Finance consists of two main divisions: the Asset Management Division, responsible for the creation and management of tokenized financial products, and the Second Division, responsible for developing decentralized financial protocols.

Investors can connect their digital wallets to invest in the products launched by Ondo. The tokenized financial products currently offered by Ondo include the yield-bearing stablecoin Ondo US Dollar Yield Token ($USDY) and the tokenized U.S. Treasury fund Short-Term US Government Treasuries ($OUSG), with plans to launch the tokenized money market fund Ondo US Money Markets ($OMMF). Purchasing these products requires KYC certification.

1. Yield-Bearing Stablecoin USDY

USDY is a tokenized note backed by short-term U.S. Treasury bonds and demand deposits, available for purchase by non-U.S. individuals and institutional investors. After investing, investors receive a Token Certificate and will receive USDY within 40-50 days, after which they can transfer USDY on-chain for free. Legally, USDY is issued by the bankruptcy-remote company Ondo USDY LLC, which somewhat isolates it from Ondo's operational risks.

As of January 23, 2024, the total locked value (TVL) of USDY is approximately $71.22 million.

(1) Yield and Fees

The annual percentage yield (APY) offered by USDY is adjusted monthly by Ondo based on actual conditions. As of January 23, 2024, USDY's APY is 5.10%. The APY for the underlying assets (i.e., the investment portfolio of U.S. Treasury bonds and bank deposits) is approximately 5.27%, with Ondo charging a fee of 0.17%.

In addition to the aforementioned spread fees, Ondo also charges a 0.2% fee for redemption. Furthermore, for investments or redemptions below $100,000, if conducted via bank wire, investors must bear the wire/money transmission fees (these fees are charged by service providers rather than Ondo). However, for investments or redemptions above $100,000, Ondo will cover these fees on behalf of the investors.

Additionally, Ondo specifically reminds investors that the structure of USDY is designed so that investors will not trigger U.S. federal income tax obligations.

(2) Token Price

The token price of USDY is calculated based on the token price on the first business day of the month and the token yield for that month. For example: if the price of USDY on June 1 is $100.00000000 and the APY for June is 4.00000000%, then the price of USDY on June 3 will be:

As of January 25, 2024, the price of USDY is $1.0242.

(3) Collateral Mechanism

USDY is issued by the independent legal entity Ondo USDY LLC and managed by an independent board, with separate books and accounts, and assets isolated from Ondo Finance, Inc.

USDY, as a priority debt backed by bank demand deposits and short-term U.S. Treasury bonds, is over-collateralized by Ondo, providing a 3% first-loss position to absorb short-term fluctuations in U.S. Treasury bond prices. This means that for every $100 worth of USDY issued, there are at least $103 worth of bank deposits and U.S. Treasury bonds as collateral. Additionally, Ankura Trust, as the collateral agent, provides daily transparency reports detailing asset holdings.

As of January 23, 2024, the total locked value (TVL) of USDY is approximately $71.22 million, with collateral valued at approximately $75.05 million, resulting in an over-collateralization amount of $3.83 million and an over-collateralization rate of 5.38%.

(4) Investment and Custody

In terms of investment, Ondo aims to maintain a portfolio consisting of 65% bank deposits and 35% short-term Treasury bonds, without investing in any other assets.

For custody, U.S. Treasury bonds will be held at Morgan Stanley and StoneX, and these U.S. Treasury bonds will not be re-collateralized; bank deposits will be held at Morgan Stanley and First Citizens Bank. Ondo also regularly publishes its collateral composition on its official website.

(5) Comparison of USDY and Stablecoins

USDY is essentially not a traditional "stablecoin," but rather a tokenized secured note. The specific comparison between USDY and traditional stablecoins is as follows:

2. Tokenized U.S. Treasury Fund OUSG

OUSG is a tokenized U.S. Treasury fund aimed at providing liquidity exposure to purchasing short-term U.S. Treasury bond ETFs. Global investors can purchase OUSG using USDC or U.S. dollars, with a minimum investment amount of $100,000 USDC. Legally, OUSG is issued by Ondo I LP, a partnership registered in Delaware, USA, following standard fund structures.

As of January 23, 2024, the total locked value (TVL) of OUSG is approximately $117 million.

(1) Investment and Custody

The investment portfolio will primarily invest in BlackRock's iShares Short-Term Treasury ETF (NASDAQ: SHV) and hold a small portion of USDC and U.S. dollars for liquidity.

Ondo I GP serves as the general partner (GP) of Ondo I LP; Ondo Capital Management acts as the investment manager to assist the GP in providing management services; Ondo Finance itself provides technical services to tokenize the fund; Clear Street acts as the brokerage and qualified custodian responsible for executing fund trading instructions (i.e., buying and selling ETFs); Coinbase serves as the cryptocurrency custodian and broker holding on-chain assets (USDC).

The relationships among the aforementioned entities can be referenced in the diagram below:

(2) Yield and Fees

As of January 23, 2024, OUSG offers an annual percentage yield (APY) of 4.73%.

For the underlying ETF assets, according to data updated on January 19, 2024: the worst estimated yield (YTW) is 5.03%, the 30-day SEC yield is 5.15%, total assets amount to $18.34 billion, and daily trading volume is $235 million.

In terms of fees: Ondo charges a management fee of 0.15%; service providers like Nav Consulting charge a service fee not exceeding 0.15% (this percentage decreases as TVL increases); the ETF management fee is 0.15%.

Since its issuance in February 2023, OUSG's price has continued to rise with the realization of yields, currently priced at 1 OUSG = $104.70.

3. Tokenized Money Market Fund OMMF

The upcoming OMMF is a tokenized money market fund aimed at providing liquidity exposure to purchasing U.S. money market funds. Similar to OUSG, global investors can purchase OMMF using USDC or U.S. dollars, with a minimum investment amount of $100,000 USDC.

(1) Investment Portfolio

The investment portfolio will primarily invest in money market funds (MMF) and hold a small portion of USDC and U.S. dollars for liquidity.

(2) Yield and Fees

OMMF has not yet been issued, with an annual percentage yield (APY) displayed on its website of 4.73%.

Future yields will be airdropped daily to token holders in the form of new tokens, and OMMF tokens will always be bought and redeemed at a price of $1.

As for the underlying MMF asset class, Ondo has not yet disclosed details.

In terms of fees: Ondo charges a management fee of 0.15%; service providers like Nav Consulting charge a service fee not exceeding 0.15% (this percentage decreases as TVL increases); the MMF management fee has not been disclosed.

4. Comparison of the Three Tokenized Financial Products

The main differences between the three tokenized financial products USDY, OUSG, and OMMF include:

• OUSG and OMMF represent equity/shares in holding Treasury bonds and money market funds, while USDY is a yield-bearing note.
• OUSG and USDY are total return instruments: any interest paid on the underlying assets will be reinvested, causing the value of these tokens to generally appreciate over time. In contrast, any interest paid on OMMF will be periodically distributed to investors in the form of additional OMMF tokens, keeping OMMF's value close to $1.
• OUSG and OMMF are available for purchase by qualified investors globally; USDY is only available to investors in eligible regions but does not require investor certification.
• OUSG and OMMF can be traded on the secondary market at any time; USDY has lock-up period restrictions but can be freely traded after the lock-up period.

The specific comparison table is as follows:

5. Flux Finance

Due to regulatory compliance reasons, some of Ondo's products can only be offered to KYC-permitted clients. Therefore, Ondo collaborates with the backend DeFi protocol Flux Finance to provide stablecoin collateralized lending services for tokens like OUSG that require permissioned investment, enabling permissionless participation in the protocol's backend.

Flux Finance is a decentralized lending protocol launched by the Ondo team based on CompoundV2, similar in nature to Compound. This protocol allows users to borrow and lend stablecoins backed by high-quality collateral such as OUSG. Currently, Ondo has sold this protocol to the Ondo Foundation (formerly known as Neptune Foundation).

The interaction between the Ondo and Flux ecosystems can be referenced in the diagram below:

III. Project Prospects

1. Industry Analysis

Ondo Finance is currently an important player in the RWA track.

RWA (Real World Assets) refers to the tokenization of real assets, allowing token holders to own corresponding assets in the real world by bringing real-world assets on-chain, enabling transactions such as loans, rentals, and sales on-chain.

RWA covers a wide range of assets, including sovereign currencies, bonds, stocks, real estate, and commodities (such as gold). U.S. Treasury bonds, as a high-quality asset with excellent credit and liquidity, have become a major driver of the recent expansion of the RWA track.

According to data from RWA.xyz, the total market value of RWA U.S. Treasury bonds was only $114 million on January 1, 2023, but reached $855 million by January 25, 2024, a sixfold increase in just one year (and this amount does not include the over $2 billion in U.S. Treasury bonds used by MakerDAO as collateral for $DAI).

Among them, Ondo's market size in RWA U.S. Treasury bonds has reached $128 million, ranking third in the market, behind Franklin Templeton Benji Investments ($336 million) and Mountain Protocol ($151 million).

U.S. Treasury bonds have high credit ratings and good yields, especially in the context of a poor global economic situation and multiple interest rate hikes by the Federal Reserve in 2023, many investors have chosen to purchase U.S. Treasury bonds for good risk-free returns. However, a major pain point for investing in U.S. Treasury bonds is the high investment threshold.

Even for U.S. citizens, the cumbersome KYC and account opening processes are enough to keep most people out, and for non-U.S. citizens, it is even more difficult. Therefore, how to bring U.S. Treasury bonds onto the blockchain and lower the investment threshold in a compliant manner is a key concern for many RWA protocols.

One of Ondo's relatively successful points is that it has preliminarily solved the compliance issues of bringing U.S. Treasury bonds on-chain within the existing legal framework in the U.S., allowing participants in the RWA U.S. Treasury market (including investors, fund managers, custodial banks, brokers, etc.) to agree on the operational rules of USDY and OUSG and to have genuinely participated.

It can be said that Ondo has seized the first-mover advantage in the RWA U.S. Treasury market. In the future, Ondo can leverage this advantage to continue expanding the tokenization paths for other asset classes.

2. Competitors

Ondo Finance's main competitors in the RWA industry include Franklin Templeton, Mountain Protocol, and others. A brief introduction to each competitor is as follows:

(1) Franklin Templeton

Franklin Templeton is a leading global asset management company with over 70 years of history, managing over a trillion dollars in assets. As a giant in traditional finance, Franklin Templeton has been very active in the cryptocurrency industry, and its application for a spot Bitcoin ETF (EZBC) was approved by the U.S. SEC in January this year.

As early as April 2021, Franklin Templeton launched the government money market fund Franklin OnChain U.S. Government Money Fund (FOBXX) on the Stellar blockchain. FOBXX is the first U.S. registered mutual fund to use public chains for trading processing and recording share ownership, regulated under the U.S. Investment Company Act of 1940. From its registration, management, and disclosure perspectives, this product is one of the most compliant RWA products on the market. FOBXX is also currently the largest product in the RWA U.S. Treasury track.

According to the FOBXX website, it invests over 99% of its total assets in securities fully backed by the U.S. government, with excellent asset credit. The shares of the FOBXX fund are represented by the "BENJI" token, which stabilizes at $1 and is primarily aimed at U.S. investors, allowing both institutional and retail users to participate. FOBXX distributes the returns from U.S. Treasury bonds to BENJI holders through its developed application, the Benji Investments App.

Currently, FOBXX has total assets exceeding $300 million, with an annual percentage yield (APY) of approximately 5.28%. In terms of institutional strength, product scale, starting time, and compliance, Franklin Templeton is undoubtedly the leader in the RWA U.S. Treasury track.

(2) Mountain Protocol

Mountain Protocol is a yield-bearing stablecoin protocol whose main business is to issue stablecoins USDM backed by U.S. Treasury bonds, allowing users to enjoy the yields of U.S. Treasury bonds while using USDM.

USDM is issued by Mountain Protocol Limited, with its collateral being short-term U.S. Treasury bonds. The company has obtained a digital asset business license from the Bermuda Monetary Authority (BMA) to ensure its compliance. Users can mint/redeem USDM stablecoins for $1 and use them in various DeFi ecosystems. Mountain Protocol adjusts the total supply of USDM based on the yield of U.S. Treasury bonds, increasing the USDM balance held by users.

Using Mountain Protocol requires KYC certification, and due to legal compliance, the protocol does not provide services to domestic U.S. users and currently only opens minting and redemption channels to institutional investors, with retail users only able to purchase on the secondary market.

Currently, USDM has total assets of approximately $150 million, with an annual percentage yield (APY) of about 5%. As a yield-bearing stablecoin, Mountain Protocol's USDM currently faces the challenge of competing with traditional stablecoins like USDT and USDC, but as a type of RWA asset, it also has significant development potential.

(3) Matrixdock

Matrixdock is a digital asset platform under Matrixport, aiming to provide RWA tokenization solutions. The product currently launched by Matrixdock is STBT, a token backed by U.S. Treasury bonds and reverse repurchase agreements collateralized by U.S. Treasury bonds.

Similar to USDM, STBT generates yield by distributing returns based on the yield of the underlying assets, increasing the amount of STBT held in users' accounts daily. Unlike USDM, USDM's on-chain transactions do not require permission, but Matrixdock restricts STBT transfers and trades to authorized accounts only through a contract whitelist mechanism. Additionally, STBT is minted using USDC or USDT, aligning more with the usage habits of on-chain users.

Furthermore, STBT's issuance also adopts the establishment of a special purpose company to achieve complete bankruptcy protection (not affected by Matrixport). Matrixdock also uses Chainlink's proof of reserves (PoR) to enhance the transparency of STBT.

Currently, STBT has total assets of approximately $95 million, with an annual percentage yield (APY) of 5.10%. Matrixdock's website has also reserved space for showcasing other types of RWA assets, but details have not yet been disclosed. As the current fourth-ranked RWA U.S. Treasury issuer by TVL, Matrixdock may need to introduce more innovative underlying assets onto the blockchain to have a chance of overtaking competitors.

3. Project Roadmap

Ondo's roadmap for the next two years includes three main phases:

Phase One: Focus on integrating tokenized cash equivalents such as USDY, OUSG, and OMMF. This includes establishing partnerships with different blockchains to add white-label tokens for brand assets on other chains and creating different token versions for various applications (Note: this can be simply understood as developing tokens based on specific standards and customizing them to a certain extent according to the project team's requirements, similar to the concept of "shelling out").

Innovative technologies like Ondo Bridge and Ondo Converter aim to facilitate cross-chain transfer and conversion of tokens, integrating these tools to provide a seamless user experience.

Phase Two: Focus on expanding the tokenization of public securities. Ondo is preparing to announce initiatives to redefine the tokenization of public securities, addressing the main barriers currently limiting the widespread use of tokenized securities on public chains, such as liquidity and infrastructure issues (Note: public securities encompass stocks, corporate bonds, REITs, and even financial derivatives like options and futures that can be traded on public markets).

Phase Three (specific details not yet disclosed): Explore the application of blockchain in various traditional financial functions while utilizing both centralized and decentralized mechanisms to maintain Ondo's institutional-grade quality standards.

Throughout these phases, Ondo will closely collaborate with partners, including various blockchain projects, OTC desks, market makers, exchanges, and DeFi protocols, to ensure broad distribution, integration, and liquidity of its products.

4. Project Security

Ondo's smart contracts have been audited by several well-known industry institutions, including:

• January 2023: Code4rena Audit
• April 2023: NetherMind Audit
• August 2023: Zokyo Audit
• September 2023: Code4rena Audit

IV. Token Economics

1. Basic Token Information

As of January 25, 2024, the basic information for the $ONDO token is as follows:

2. Actual Use Cases for the Token

Currently, $ONDO serves as the governance token for Ondo DAO, with no other practical use cases. There are no incentive measures involving the $ONDO token in the related products of Ondo Finance.

According to the Ondo Foundation's description:

Ondo DAO grants $ONDO holders specific rights related to Flux Finance, which are currently governed by Ondo DAO:

• Launch new fToken markets (i.e., support new assets as collateral and/or lendable within the Flux protocol)
• Suspend fToken markets
• Update interest rate models for each market
• Update oracle addresses
• Withdraw reserves from fToken markets

Ondo DAO also has the following additional rights:

• Select new administrators
• Manage the asset pool
• Control the release of $ONDO to effectively increase the usage of Ondo DAO products
• Call any function

As of January 25, 2024, a total of 9 proposals have been initiated on Ondo DAO, with 8 approved and 1 canceled.

Since it is currently unclear how the $ONDO token relates to RWA products, the market speculates that Ondo may later use $ONDO as an incentive for tokenized financial products like USDY.

If the $ONDO token can be integrated with RWA products, using the $ONDO token as an incentive for the on-chain liquidity of RWA products could potentially bring RWA products into the view of mainstream crypto investors.

3. Token Distribution

According to a proposal by the Ondo Foundation on December 27, 2023, the proposed distribution of $ONDO is as follows:

• Community Sale: 198,884,411 (~2.0%)
• Ecosystem Growth: 5,210,869,545 (~52.1%)
• Protocol Development: 3,300,000 (33.0%)
• Private Sale: 1,290,246,044 (~12.9%)

Currently, nearly 80% of the $ONDO tokens remain in the project team's wallet and have not yet been distributed.

4. Token Unlocking Timeline

According to the Ondo Foundation's proposal, over 85% of the $ONDO tokens will be locked, with the locked tokens unlocking 12, 24, 36, 48, and 60 months after the initial token unlock. Both private investors and the project team will be locked for at least 12 months, with subsequent unlocking over the next 4 years. Investors who participated in the ICO through CoinList had all their tokens unlocked on January 18, 2024.

It is worth mentioning that in recent days, the project team's address has repeatedly transferred $ONDO tokens to exchange addresses (currently, the $ONDO in the project team's wallet is less than 80% of the total circulating supply), possibly indicating that the project team is lending tokens for market making.

5. Token Price Trends

Community investors' $ONDO was unlocked on January 18, 2024, and has only been trading on the secondary market for 7 days. Its historical trend is as follows:

Additionally, the primary market trading prices of $ONDO before unlocking were as follows:

• August 2021 Seed Round Financing:
• 1 ONDO = 0.0057 USD
• April 2022 Series A Financing:
• 1 ONDO = 0.0285 USD
• May 2022 ICO Financing:
• 1 ONDO = 0.055 USD

6. Major Trading Venues for the Token

According to CoinMarketCap data, the main trading venues for $ONDO are Bybit, HTX, and Gate.io, with the specific distribution as follows:

7. Other On-Chain Data

V. Conclusion and Risk Warning

In summary, the main highlights of Ondo Finance are as follows:

• The RWA U.S. Treasury track that Ondo Finance operates in has seen a 6-fold increase in TVL over the past year, making it a major driving force in the RWA industry, with vast industry prospects.
• Ondo Finance ranks third in TVL within the RWA U.S. Treasury track, having validated the feasibility of its business model in this track, presenting a certain first-mover advantage.
• Ondo Finance is planning other types of RWA products; if it can launch products that are easily accepted by the market in the future, it will further expand its leading advantage and become an important bridge connecting on-chain and off-chain.
• Ondo Finance, through partnerships with leading companies in the industry like Morgan Stanley and Coinbase (which is also an investor in Ondo), strictly adheres to U.S. laws and regulations, making it easier to gain investors' trust.
• The founders and core team of Ondo Finance have previously worked at Goldman Sachs, Morgan Stanley, Tether, Bitfinex, Circle, and other companies, which is beneficial for further deep cooperation with these enterprises.

The main risks of Ondo Finance are as follows:

• The RWA track is still in its infancy, and many strong leading institutions are also vying to enter this field, meaning Ondo Finance will face very intense market competition in the future.
• The $ONDO token currently has no practical use cases other than serving as the governance token for Ondo DAO. The connection between Ondo Finance's related products and $ONDO is weak, and the future usage scenarios for $ONDO are uncertain.
• Approximately 80% of the $ONDO token is still held by the project team, with an unclear distribution mechanism, posing significant centralization risks.