The recent popularity and surge of the Real World Assets (RWA) protocol, Ondo Finance, reflects the traditional financial giants’ layout on the RWA track and also demonstrates the potential for collaboration between blockchain and traditional financial institutions in the future.
Recently, the proposal to unlock the ONDO token by the Ondo Foundation, the organization behind the RWA protocol Ondo Finance, was approved by a vote. ONDO tokens officially entered circulation on January 18th. At the same time, the exchange Coinbase added Ondo Finance (ONDO) to its asset listing roadmap, and Binance also launched ONDO 1-50x perpetual contracts.
According to CoinGecko data, since its launch on the 18th, the ONDO token has surged more than 300%. In less than a week, ONDO has taken the entire crypto community by storm, becoming a hot topic of discussion on various platforms.
After the surge in unlocking, the controversial behavior of the project team actively selling tokens began to attract attention. According to the analysis by online analyst @ai_9684xtpa, the ONDO team has allegedly sold a total of 60 million ONDO tokens since its listing. Currently, two addresses still hold 106 million tokens, accounting for 7.79% of the total circulation. However, despite the massive selling, the ONDO token price remains relatively stable, hovering around $0.25. Behind the stable token price is the attractiveness of RWA’s wave of capital.
Ondo Finance and the traditional financial giants behind it have been working together since before the token unlocking proposal was announced. Ondo Finance announced a loyalty points program and cooperation with Mantle and Solana to introduce USDY on its blockchain. After the token unlocking announcement, Ondo Finance announced its expansion into the Asia-Pacific region by opening its first office in Hong Kong on the 23rd. It also published an ecosystem catalog on its official website, disclosing partnerships related to liquidity, custody, and other key areas. The list of asset management trust companies includes traditional financial giants such as Morgan Stanley, BlackRock, Ankura Trust, Clear Street, and NAV Consulting.
Ondo Finance received support from institutions like BlackRock and Morgan Stanley from the very beginning and investments from top venture capital firms such as Founders Fund, Pantera Capital, and Coinbase Ventures.
Crypto analyst McKenna publicly expressed optimism about Ondo Finance as a “future blue-chip RWA asset” and stated:
“In March last year, BlackRock CEO Larry Fink stated in his annual letter to BlackRock shareholders, ‘BlackRock will continue to explore the digital asset ecosystem, particularly in areas most relevant to our clients, such as permissioned blockchains and the tokenization of stocks and bonds.’ BlackRock’s bet on Ondo undoubtedly provides an opportunity for its entry into the RWA field.”
Currently, Ondo Finance has tokenized BlackRock’s short-term US Treasury Bond ETF, iShares Short Treasury Bond ETF (NASDAQ Code: SHV), creating the OUSG (US Treasury) product. This is also the main contributing product to Ondo Finance’s Total Value Locked (TVL). The current price of OUSG is $104.66 with an annualized yield of 4.69%. It supports purchases on Ethereum, Polygon, and Solana chains. As the issuer of the ETF, BlackRock charges a 0.15% ETF management fee, while OUSG collects a 0.15% fund management fee. This has undoubtedly become a successful case of traditional finance entering the RWA field, as Larry Fink, CEO of BlackRock, said:
“Starting with OUSG, BlackRock has taken the first step in asset tokenization.”
The entry of financial giants into the RWA field may usher in a golden age of collaboration between blockchain and traditional finance. This is not the first time that traditional finance has ventured into the tokenization of real-world assets (RWA). “Tokenizing all real-world assets to create liquidity for non-liquid things” has always been the ultimate vision of developers in the crypto field for the future.
One argument that cryptocurrencies and the traditional financial field increasingly share is that the tokenization of Real World Assets (RWA) will become the pillar of the next bull market and release trillions of dollars of real-world assets into cryptocurrencies.
Boston Consulting Group predicted:
Citigroup also stated:
The tokenization of Real World Assets (RWA) is also expanding into areas such as bonds, cars, gold, and real estate, attracting the interest and attention of traditional financial giants.
As early as 2021, investment fund giant Franklin Templeton pioneered RWA experiments by launching the Franklin OnChain US Treasury Tokenization Fund on Stellar and later expanded to Polygon in 2023. This fund is the first US registered mutual fund to use public blockchains to process transactions and record share ownership. Stellar provides fast, low-cost transactions and handles asset issuance and exchange in a decentralized manner.
The tokenization of RWA is opening a new golden age for blockchain and traditional finance. To date, various institutions, including JPMorgan Chase, Goldman Sachs, BlackRock, and Fidelity, have embarked on the exploration of RWA.
JPMorgan Chase launched the blockchain-based enterprise platform Onyx Digital Assets in November 2020. Through the Tokenized Collateral Network (TCN), it aims to tokenize the ownership rights of Money Market Fund (MMF) shares, allowing asset management companies and institutional investors to pledge or transfer MMF shares as collateral. Subsequently, JPMorgan Chase achieved the tokenization of US dollar deposits on the Quorum blockchain through JPM Coin in October 2022.
Goldman Sachs launched its digital asset platform GS DAP in January last year. The platform is based on Digital Asset’s Daml smart contract language and the privacy blockchain Canton. Digital assets ensure that data is only shared with qualified stakeholders through its privacy protocol, while supporting the scalability required for globally connected assets.
Fidelity faced obstacles in opening a Bitcoin account for its 401(k) last year and is currently in a wait-and-see state in the RWA field.
Currently, the market value of Ondo’s Short-Term US Treasury Bond Fund (OUSG) is $111.5 million, second only to Franklin Templeton’s Franklin OnChain US Treasury Fund and Mountain Protocol’s Mountain Protocol USD (USDM), which have market values of $325.5 million and $151.1 million, respectively.
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