Ondo Finance (opens in a new tab) builds tokens that stand for traditional investments. Founded in the United States in 2021, the company creates and manages on-chain products linked to assets such as short-term US government debt and listed US shares, a field usually described as tokenised real-world assets. ONDO, the coin traded on exchanges, comes from the same ecosystem, yet it is not one of those asset-linked products.
Two products show how the model works. OUSG offers exposure mainly to short-term US Treasuries. USDY is a tokenised note secured by short-term Treasuries, shares in a short Treasury ETF or bank demand deposits, and its price per token goes up as interest builds. A third line, Ondo Stocks, tracks the economic value of US shares and ETFs, although holders receive no rights to the underlying shares themselves.
Who may buy them matters for anyone in Europe. According to Ondo's legal disclaimers, its tokenised products are sold in the European Economic Area only to qualified investors, and USDY is meant solely for eligible investors outside the United States. So when a MiCA-licensed exchange lists ONDO, it is selling the governance token, not a stake in a Treasury fund. The MiCA white paper listed in ESMA's register classes ONDO as a crypto-asset other than an e-money or asset-referenced token and says it is not backed by real-world assets.
What ONDO does is give its holders a vote in the Ondo DAO. That DAO governs Flux Finance, a lending protocol that accepts tokenised securities as collateral, and it can manage a treasury and control ONDO emissions. The token itself comes from the Ondo Foundation. Set up in 2022 with help from Ondo Finance, the foundation sold ONDO to more than 18,000 people through CoinList that same year.
Ten billion ONDO exist, and the foundation says no inflation is scheduled. Everything stayed locked until 18 January 2024, when a DAO vote made the token transferable; under the foundation's plan, about 14.3% of the supply was free at that point, with the rest released in yearly steps to 2029. ONDO lives on Ethereum as an ERC-20 token.
None of the Treasury yield reaches ONDO holders, and the token's euro price can drop steeply within days.
Official website: ondo.finance (opens in a new tab)