A Beginner's Guide to Ondo

Ondo Finance is a pioneering platform that bridges the gap between traditional financial assets and blockchain technology. By tokenizing real-world assets (RWAs), like bonds and exchange-traded funds (ETFs), Ondo democratizes access to institutional-grade financial products and offers innovative solutions to investors.

The market for asset tokenization is projected to reach $15 trillion by the end of the decade. Ondo Finance is strategically positioned to capitalize on this growth. Ondo represents a significant advancement in integrating traditional finance with blockchain technology by offering financial products catering to retail and institutional investors.

This beginner's guide explores Ondo's core functionalities, its role in tokenizing real-world assets, the ecosystem surrounding it, and the significance of the Ondo token.

Before You Get Started

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What is Ondo Finance?

Operating as an open, decentralized bank, Ondo improves upon DeFi-TradFi connectivity, enabling institutional-grade products, such as US treasury-backed tokens, to be brought on-chain. Ondo Finance focuses on tokenizing real-world assets, including bonds and exchange-traded funds (ETFs). Launched in 2021, Ondo makes financial services available to everyone, by providing a regulated environment for trading tokenized securities. Ondo gained traction when interest in RWAs surged, highlighting the potential for integrating traditional finance with blockchain technology.

Use Cases of Ondo in Real-World Asset Tokenization

Ondo Finance is at the forefront of a movement to tokenize real-world assets, which involves creating digital representations of physical assets on a blockchain. The tokenization process enhances liquidity and makes these assets accessible to a broader audience. Some key use cases include:

• Tokenized U.S. Treasuries: Ondo offers products like USDY, which are backed by U.S. Treasuries. This enables investors to gain exposure to stable, low-risk assets while benefiting from the advantages of blockchain technology, such as 24/7 trading and lower transaction costs.

• Institutional-grade financial products: Ondo provides fixed-yield loans backed by yield-generating crypto assets. This approach enables investors to earn returns similar to traditional fixed-income securities but with the added benefits of DeFi, such as transparency and reduced reliance on intermediaries.

• Cross-chain asset movement: The Ondo platform supports multiple blockchains, including Ethereum, Solana, and Aptos, enabling seamless asset transfers and enhancing liquidity across different networks. Interoperability is important for attracting a diverse range of users and investors.

The Ondo Ecosystem

The Ondo ecosystem is built through collaboration with various partners and service providers to enhance its offerings. Ondo collaborates with centralized exchanges (CEXs), over-the-counter (OTC) desks, and decentralized finance (DeFi) protocols to ensure liquidity for its tokenized products. This network enables users to access capital efficiently and securely.

Trust and security are essential in the crypto sector. Ondo partners with reputable custodians and asset managers, such as BlackRock and Morgan Stanley, to ensure the safety of investors' assets. Ondo’s commitment to transparency and risk management is fundamental to building investor confidence.

The ONDO token serves as the governance token for the Ondo Finance platform. Token holders can participate in decision-making processes, influencing protocol upgrades, economic parameters, and other critical aspects of the platform. Their decentralized governance lets the community have a say and ensures that user interests align with the platform's growth.

The ONDO Token

The ONDO token is integral to the Ondo Finance ecosystem, serving multiple purposes:

• Governance: The ONDO token enables holders to participate in the governance of the Ondo ecosystem. This includes voting on key protocol matters such as economic parameters, smart contract upgrades, and overall management of the Ondo DAO (Decentralized Autonomous Organization).

• Ecosystem growth: A significant portion of the total supply of ONDO tokens (52.1%) is allocated for ecosystem growth. This allocation incentivizes users to hold and engage with the platform, rewarding them for their participation in governance and other activities.

The total supply of ONDO is capped at 10 billion tokens, with an initial unlocked supply of 1.4 billion. The distribution is structured to avoid inflation, with tokens allocated for various purposes and vested over time. The token has gained significant market interest, reaching a market capitalization of over $1 billion shortly after its public launch in January 2024.

Relationship with Ethereum

Ondo Finance launched its first products, including the ONDO token, on the Ethereum blockchain. This choice of blockchain enables Ondo to use Ethereum's established infrastructure and security features, enabling the tokenization of traditional assets like U.S. Treasuries and money market funds.

While initially launched on Ethereum, Ondo Finance has expanded its operations to include other blockchains, such as Solana and Cosmos. This cross-chain capability enhances its reach and usability across different platforms, but Ethereum remains a foundational element of its ecosystem.

How to Swap ETH for ONDO

You can swap crypto, including ONDO, using Trust Wallet, via our trusted partners. Here’s how:

• Select “Swap” from the Trust Wallet home screen.

• Ensure Ethereum is selected in the “From” network field, and choose ETH as your token

• Ensure Ethereum is selected in the “To” network field, and choose ONDO as your token.

• Enter the amount of ETH you would like to swap.

• Select “Continue” and complete the remaining steps.

Conclusion

Ondo Finance is a significant advancement in the integration of traditional finance with blockchain technology. By tokenizing real-world assets and offering a range of financial products, Ondo is paving the way for a more inclusive and accessible financial ecosystem. As the platform continues to grow and evolve, it will be essential for users to stay informed about its developments, governance opportunities, and market dynamics. With the ONDO token at the heart of its operations, Ondo Finance is poised to play a pivotal role in the future of decentralized finance. Using Trust Wallet as your secure ONDO wallet provides seamless access to innovative features and opportunities within the Ondo ecosystem.

Disclaimer: Content is for informational purposes and not investment advice. Web3 and crypto come with risk. Please do your own research with respect to interacting with any Web3 applications or crypto assets. View our terms of service.

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Note: Any cited numbers, figures, or illustrations are reported at the time of writing, and are subject to change.