1. Industry background: With the continuous development of blockchain technology, real world assets (RWA, Real World Assets) have gradually become a hot topic in the financial market. The core concept of RWA is to tokenize real assets so that token holders can own the corresponding assets on the blockchain and conduct transactions such as loans, leases, and sales. RWA covers a wide range of assets, including sovereign currencies, bonds, stocks, real estate and commodities.
In this context, Ondo Finance, as an important member of the RWA track, is actively promoting the tokenization process of high-quality assets such as U.S. debt. According to data from RWA.xyz, the total market value of the RWA market for U.S. Treasury bonds was only US$114 million at the beginning of 2023, but it had grown to US$855 million by the beginning of 2024, an increase of six times. Among them, Ondo has a scale of US$128 million in the U.S. debt market, ranking third in the market, demonstrating its strong competitiveness in this field.
2. Market demand and pain points
Although U.S. debt, as a high-quality asset with extremely high credit and good liquidity, has attracted a large number of investors, the investment threshold is still a significant pain point. Especially for non-U.S. citizens, the cumbersome KYC (customer identity verification) and account opening processes often put them off. Therefore, how to lower the investment threshold for U.S. debt within a compliance framework has become an urgent issue for the RWA agreement.
Ondo Finance's success in this field is to introduce U.S. debt into the blockchain in a compliant manner, solving the pain points of market participants (including investors, fund managers, custodian banks, etc.). Ondo’s USDY and OUSG tokens not only comply with the existing legal framework in the United States, but are also widely recognized by market participants, laying a solid foundation for future expansion.
3. Competitive Landscape
In the RWA industry, Ondo Finance’s main competitors include Franklin Templeton, Mountain Protocol and Matrixdock, etc. Here is a brief analysis of these competitors:
Franklin Templeton: As a leading global asset management company, Franklin Templeton occupies an important position in the RWA circuit. The Franklin OnChain U.S. Government Money Fund (FOBXX) launched by it is the first U.S.-registered mutual fund to process transactions on the public chain, and has extremely high compliance and market recognition. FOBXX's total assets exceed US$300 million, with an annual return rate of approximately 5.28%, taking a leading position in the RWA U.S. bond market.
Mountain Protocol: Mountain Protocol focuses on issuing stablecoins USDM with U.S. Treasury bonds as collateral. The agreement has obtained a digital asset business license issued by the Bermuda Monetary Authority to ensure its compliance. The annualized return rate of USDM is approximately 5%. Although it faces competition from traditional stablecoins, its potential as a RWA asset cannot be underestimated.
Matrixdock: Matrixdock is a digital asset platform owned by Matrixport and is committed to providing RWA tokenization solutions. The STBT token it launched also uses U.S. Treasury bonds as the underlying asset, with an annual return rate of 5.10%. Matrixdock restricts STBT transactions through a contract whitelist mechanism to ensure its compliance and transparency.
4. Project Roadmap
Ondo Finance’s development roadmap for the next two years is divided into three main stages:
Phase One: Integrating Tokenized Cash Equivalents
Ondo will focus on integrating tokens such as USDY, OUSG and OMMF, and establishing partnerships with different blockchains to promote cross-chain transmission and conversion of tokens. Through innovative technologies such as Ondo Bridge and Ondo Converter, Ondo aims to provide users with a seamless experience.
Phase 2: Expanding the tokenization of public securities: In this phase, Ondo will further expand the tokenization path of public securities, striving to attract more market participants and promote the prosperity of the RWA market under the premise of compliance.
The third stage: Expansion of diversified asset classes: In the future, Ondo plans to use its advantages in the U.S. bond market to continue to expand the tokenization path of other asset classes, including real estate, stocks and other assets to meet the needs of different investors. need.
5. Conclusion
Ondo Finance is providing investors with a more convenient investment channel by virtue of its first-mover advantage in the RWA U.S. bond market and its compliant tokenization solution. As market demand continues to grow, Ondo is expected to further consolidate its market position in the future and become a leader in the RWA track.
Through continuous innovation and expansion, Ondo can not only meet the needs of current investors, but also bring more possibilities to the future financial market. For investors who want to enter the RWA market, Ondo is undoubtedly a project worthy of attention.