What is Ondo: the bridge between DeFi and TradFi

What is Ondo? The protocol that connects DeFi and TradFi through the tokenisation of real-world assets (RWAs).

Ondo is a platform designed to make institutional financial products and services accessible to everyone by leveraging blockchain technology and the tokenisation of real-world assets (RWAs).

To achieve this, Ondo has developed an infrastructure that combines the strengths of traditional finance – such as investor protection and regulatory compliance – with the benefits of blockchain, including operational efficiency, global accessibility, and automated processes.

Backed by major names in traditional finance – including BlackRock, Goldman Sachs, and Franklin Templeton – as well as prominent DeFi partners like Ethereum, Solana, Ripple, Sui, and Aptos, Ondo is emerging as one of the most successful platforms bridging the gap between decentralised and traditional finance.

If you’ve been wondering what ONDO is and how it works, this article is your starting point.

What is Ondo

Founded by Nathan Allman and Pinku Surana and officially launched on 27 July 2021, Ondo Finance has quickly become one of the most prominent platforms for asset tokenisation, thanks in large part to the institutional expertise of its founders.

With a TVL (Total Value Locked) currently exceeding £1.3 billion, and an active presence on 10 major blockchains, Ondo has established itself as a key player in the growing Real World Assets (RWA) sector.

Supported by an increasingly favourable and clearly defined regulatory framework that encourages financial innovation, Ondo has seen near-exponential growth in adoption since early 2025. It is now regarded as one of the most relevant and widely discussed projects in the crypto industry – and beyond.

How does Ondo work?

To fully understand Ondo Finance, it’s important to grasp the concept of real-world asset tokenisation, commonly referred to as RWAs. If you’re not yet familiar with this topic, we recommend reading our article: “Real World Assets (RWA): What They Are and How Tokenised Securities Work”. It offers a concise yet comprehensive overview to help you understand the economic and financial context in which Ondo operates.

Once you’ve got to grips with RWAs, understanding how Ondo works becomes much simpler. Think of Ondo as a technological and legal infrastructure that enables the tokenisation of assets, turning them into digital instruments that are accessible, transferable, and compatible with the blockchain. Here’s how the process works:

Ondo acquires traditional real-world assets, such as US Treasury bills, through regulated partners, including brokers and financial institutions.

The acquired assets are held in custody by trusted, regulated financial entities – such as partner banks – ensuring full transparency, regulatory compliance, and investor protection.

3. On-Chain Token Issuance

Once the asset has been securely acquired and held in custody, Ondo issues a corresponding on-chain token that represents the asset’s value on a 1:1 basis. This token represents the economic rights associated with the underlying asset and can be transferred, traded, or integrated into decentralised finance (DeFi) protocols.

Through this architecture, Ondo provides DeFi users with access to traditional financial instruments in a decentralised and permissionless environment – opening up investment opportunities that would otherwise be limited to institutional investors or come with high barriers to entry.

Ondo Chain – the ultimate blockchain for RWA tokenisation

In addition to operating on some of the most prominent blockchains in the industry – including Ethereum, Solana, and Mantle – the Ondo team has taken a significant step towards enabling the next wave of mass adoption: the creation of its own blockchain, purpose-built to natively and optimally manage real-world assets (RWAs).The result is Ondo Chain – a Layer 1 network designed from the ground up to meet the unique requirements of institutional finance and to enable the seamless integration of traditional assets into the on-chain ecosystem.

The decision to launch a specialised blockchain stems from two core needs:

1. Efficiency and Lower Costs

General-purpose blockchains are not optimised for the complexities of regulated financial assets. Ondo Chain, by contrast, is being developed to offer fast, cost-effective operations, fully integrated with existing financial infrastructure.

To attract capital from institutional investors, Ondo recognised the importance of building a network founded on clear rules, controlled validator access, and a strong emphasis on smart contract security. The result is a controlled, transparent, and secure environment tailored to the expectations and requirements of the traditional financial world.

Although Ondo Chain has not yet officially launched, several indicators suggest its public debut could happen by 2025. Once live, this infrastructure could mark a major turning point in the digitisation of real assets – offering a solid, secure, and compliant foundation to support the long-term growth of on-chain RWAs.

Ondo Global Markets – Where Wall Street meets DeFi

Driven by a mission to democratise access to traditional finance through blockchain, Ondo’s long-term vision goes far beyond simply tokenising instruments like US Treasury securities.

The ambition? To bring the entire global financial market on-chain.To achieve this, Ondo is developing Ondo Global Markets – a new technological infrastructure designed to make stocks, ETFs, and other listed securities natively accessible within decentralised finance (DeFi).

Ondo Global Markets is a platform that leverages real-world assets (RWAs) to bridge traditional financial instruments with the DeFi ecosystem. It allows users to hold and trade these assets freely using nothing more than a web wallet and an internet connection.

Created to address some of the main limitations of traditional finance, Ondo Global Markets aims to reshape how users interact with financial markets, offering a regulated and scalable infrastructure with key advantages:

Powered by blockchain, Ondo Global Markets will enable users to buy, sell, redeem, and transfer assets at any time, from anywhere in the world, with no downtime or operational interruptions.

Tokenised assets can be used as collateral within DeFi protocols, enabling access to decentralised loans without relying on traditional financial intermediaries.

Although Ondo Global Markets is still under development, its anticipated launch by the end of 2025 could represent a significant leap forward in global access to and control over financial instruments, laying the groundwork for a more inclusive, transparent, and accessible financial system for users worldwide.

Ondo Flux Finance

Flux Finance is another essential component of the Ondo ecosystem, designed to bridge the gap between traditional finance (TradFi) and decentralised finance (DeFi) in the lending and borrowing space.

Flux Finance is a lending and borrowing protocol developed by Ondo Finance, created to allow users to access liquidity by using real-world assets (RWAs) as collateral.This innovative approach opens the door to a new generation of on-chain financial services, enabling users to take out loans directly on the blockchain while backing them with traditional financial instruments. In doing so, Ondo is helping to build a fully decentralised financial infrastructure, capable of delivering many of the core services of traditional finance in a permissionless and transparent way, while maintaining the inherent advantages of blockchain technology.

At present, the Flux Finance protocol only supports OUSG – a token that represents tokenised US Treasury securities – as collateral for borrowing and lending positions. In other words, only OUSG can currently be used within the protocol.

However, future developments aim to expand the range of supported tokenised assets, broadening both the use cases and accessibility of the Ondo ecosystem.

Ondo and institutional players: a strategic alliance to transform financial markets

As decentralised finance moves further away from its early “degen” and anarchic roots, it is rapidly evolving into a more regulated, institutional-grade ecosystem, where collaboration with traditional finance plays a decisive role in shaping successful financial services.In this increasingly interconnected environment between DeFi and TradFi, Ondo has emerged as a key player in bridging the two worlds, with over 100 active partnerships spanning major institutions and leading crypto-native projects.

Partnerships with BlackRock, Google Cloud, Mastercard, and PayPal are just a few of the strategic alliances Ondo has secured – highlighting its deep connections with the world of traditional finance. Simultaneously, integrations with major Web3-native protocols such as Ethereum, Polygon, Curve, and Pendle are enabling Ondo to build one of the most ambitious and wide-reaching points of convergence between DeFi and TradFi on a global scale.

ONDO Token: Uses, Tokenomics and Governance

The ONDO token is the cornerstone of the entire Ondo ecosystem, playing a central role not only in the governance of the core protocol but also in that of related projects such as Flux Finance. This structure fosters a model of coordinated and collective governance across multiple initiatives.As a result, ONDO carries value well beyond simple voting power in a single protocol. It functions as a cross-protocol governance instrument, with a role more akin to holding company equity than a standard governance token linked to a single platform

The maximum supply of the ONDO token is capped at 10 billion units. Currently, around 3.39 billion tokens are in circulation, representing 33.9% of the total supply – an indication that the token is still in an early distribution phase, with further releases scheduled over time.

According to data from Tokenomist.ai, the ONDO token is subject to a gradual unlocking schedule, with annual releases scheduled to occur each January until 2029. At that point, the full 10 billion tokens will have been released into circulation.

Ondo vs. competitors: some comparative data

Ondo Finance is now one of the leading players in the real-world asset (RWA) sector, helping to drive a transformational shift in the global financial system.As of now, Ondo ranks third among RWA projects by Total Value Locked (TVL), accounting for approximately 10% of the market. The only projects ahead in terms of market share are Securitize with 27.8% and Tradable with 16.0%.

RWA regulation: the big challenge for the future of tokenisation

Regulation remains one of the most significant uncertainties facing Ondo – and the RWA sector more broadly.

Given that RWAs include highly regulated financial instruments – such as US Treasuries or publicly traded shares on platforms like the NYSE – ensuring security and regulatory compliance is absolutely critical.

It will fall to leading projects such as Ondo, in collaboration with strategic partners, to push for a clearer, innovation-friendly regulatory framework – one that can support the sector’s sustainable growth over the long term.

Encouragingly, the current US administration appears increasingly open to the idea of regulated, on-chain finance. This could lead to a more collaborative dynamic between the crypto industry and regulatory bodies, helping to reduce legal uncertainty and encourage responsible innovation.

Conclusion

The tokenisation of real-world assets (RWAs) represents one of the most promising and transformative trends in the global financial landscape. In a world where the boundaries between traditional finance and decentralised finance are becoming increasingly blurred, Ondo Finance stands as a clear example of how on-chain innovation can be successfully merged with real-world economic infrastructure.

With a solid track record, a wide network of high-value partnerships, and a framework built around institutional-grade compliance, Ondo is now emerging as a leader in digital asset integration – shaping the future of finance by bringing real-world assets onto the blockchain.