*This one-page memo serves as a professional exercise in crafting investment memoranda. It is not affiliated with Ondo Finance or any other project. The author aims to refine their skills in writing comprehensive and effective investment memos.

Applicable constraints: Length- 1 page or as brief as possible*

Proposal: Increase Stake in Ondo Ecosystem

Pitch:

Ondo Finance is a cross-chain DeFi platform that tokenizes real-world assets (RWAs) and offers institutional-grade financial products and services. By bridging traditional and decentralized finance, Ondo Finance enables users to trade tokenized versions of real-world securities including US-regulated securities, providing unparalleled access and flexibility.

Ondo Finance is organized into two core divisions: the asset management wing and the technology division. The Asset Management division is responsible for designing and overseeing the development of tokenized financial products, ensuring that they meet the highest standards of quality and regulatory compliance. Concurrently, the technology division focuses on developing and refining decentralized finance protocols, which are essential for the efficient and scalable operation of Ondo's financial services.

Market:

Boston Consulting Group estimates the tokenization of global illiquid assets to be a $16T business opportunity by 2030. These global illiquid assets include real estate, physical art, pre-initial public offering stocks(IPO), private funds, bonds, and many more. That’s their projections for the worst-case scenario, the best-case predictions exceed a $68T market. Get a detailed overview of the paradigm of RWA here.

The global value of total assets is estimated to be worth well over $900T. Thus, the disruption is long due and the innovation is rampantly shaping up the way we trade and preserve our assets. Ondo ecosystem currently has OUSG and USDY tokens, which are the tokenized versions of United States government-backed securities.

Ondo DAO also governs Flux Finance, which provides stablecoins lending and borrowing services against the U.S. treasuries. The Ondo ecosystem also consists of tools such as the Bridge and Converter, facilitating lucid trading for consumers. As the DeFi market continues to mature and evolve, Ondo is well-positioned to capitalize on the growing demand for tokenized real-world assets and decentralized lending services.

Timing and Opportunity:

Initially, RWA issuances were primarily conducted on private, permissioned blockchains such as Nasdaq Linq (2015) and JPM Quorum (2016). However, as the demand for interoperability and scalability grew, asset managers began to transition to public blockchains.

In a recent development, Ondo Finance announced that it will be moving $95 million of assets backing its OUSG token to BlackRock's BUIDL tokenized fund. This move will allow for instant, around-the-clock subscriptions and redemptions for the OUSG token, significantly improving its usability as a store-of-value and collateral asset within the crypto ecosystem.

Ondo Finance has also partnered with various blockchain platforms, including Aptos, Sui, and Solana, integrating its tokenized treasury products (USDY) and exploring further DeFi applications. This multi-chain strategy broadens Ondo's reach and positions it as a leader in the RWA tokenization space.

The Ondo Finance token (ONDO) currently trades at $1.20, representing a 645.09% increase since its inception on January 18, 2024. In just 6 months, the token has demonstrated significant growth and shows great promise as the tokenization of real-world assets (RWA) scales exponentially. As the decentralized finance (DeFi) market continues to experience robust expansion, Ondo is strategically positioned to solidify its status as a preeminent player within the blockchain ecosystem.

Distribution and KPI:

TVL: $545.89 million

FDV: $12.188 billion

Mcap: $1.728 billion

$USDY Mcap: $279 million

$OUSD Mcap: $218 million

Team and Funding: 

Ondo Finance, also known as Ondo, was officially announced on July 27, 2021. The platform was founded by Nathan Allman and Pinku Suran, who brought together their expertise in finance and blockchain to create a pioneering decentralized finance (DeFi) platform. Ondo Finance aims to “accelerate DeFi adoption among mainstream investors by enabling the granular exchange of risk”.

Funding Rounds:

Seed: $4 million

Series A: $20 million

ICO: $22 million

IEO: $40 K

Thus. Ondo has raised a total capital of $46.04 million. Prominent backers include Pantera Capital, Founders Fund, Coinbase Ventures, and Tiger Global Management among many others. Ondo Finance aims to utilize the funding to support the expansion of its team and the development of new product offerings.