Ondo Finance, Stablecoins, and The Tokenization of U.S. Treasuries

追加: 2026-05-19

[00:00:00]So Ripple and Ono just completed a crossborder treasury redemption alongside JP Morgan and Mastercard and the question that I see coming up is who is likely to be the real winner here in regards to the tokenization of securities.

[00:00:18]Now we also have the Canton network.

[00:00:21]Now, there's also the Canton network who is on record in collaboration with the DTCC uh in their tokenization of securities throughout the entire securities industry as early as July 13th of this year.

[00:00:36]So, I'm going to potentially do a little series here breaking down each of these projects and at the end I'll compare and contrast all of them to determine who might be the most important in this era of tokenization.

[00:00:53]So, today I'm going to start off with let's talk about what iso, what do they do?

[00:01:02]Let's talk about the token and what it means for you and your money. Ono is a platform that is bringing traditional public securities onto the blockchain. Now, the main two products that Onondo offers that are unique are USDY and OSG.

[00:01:22]USDY is a permissionless stable coin that offers daily yield backed by treasuries and bank deposits.

[00:01:32]Now, I said permissionless in that way because in reality, Ando technically doesn't even offer these two products that I'm about to go over in the United States and they gate access to these products uh via location gating on their website.

[00:01:52]And in general, they have to make sure that they follow US laws and other laws when they're trying to offer these products. Basically, making sure that they know the customer and that they are not helping to facilitate any sort of money laundering or terrorism financing.

[00:02:09]Now, O USG on the other hand is a token that offers exposure to short-term US treasuries with 247 instant mints and redemptions that also pays out yield. Now, the way that this actually works iso actually buys treasury security funds that they hold as the underlying asset backing the OSG token. So, it's not that they're necessarily going out and buying the treasuries themselves, but instead they're actually buying the funds that hold those treasuries. Now, let's break down USDY and O USG and what makes them different.

[00:02:54]So USDY is a stable coin and in that it is backed one to one with US treasuries and O USG is a token that represents ownership in funds that hold US treasuries.

[00:03:11]And so the major difference really is a legal one, right? When you are buying a stable coin, you are essentially a creditor to the stable coin issuer and your claims to what you've given them are actually collateralized by the underlying assets which in this case are US treasuries. And in this case, the treasuries are held directly through the custodians of the treasuries that Onondo has. Now, for the OSG token, once again, what you're really looking at here is a piece, you're getting a piece of a fund. And in that sense, it's more of an equity like relationship. So practically for USDY, you could look at it as, hey, here's my dollar. Take that and buy treasuries.

[00:04:12]You owe me that money back plus yield.

[00:04:16]Now for O USG, it's more like I give you my dollar, you take that and you buy a share of a treasury investment fund. And so therefore, it's much more of an equity-like structure. Ando created these two different products because O USG is really designed for institutions and it's much more of a trad kind of a product. It's an institutional fund offering essentially that's tokenized and onchain. But on the other hand, USDY is designed for more DeFi level types of integrations and honestly offers something that's rather unique in the stable coin world because not many stable coins have this yield bearing piece to it. But hence why it's also not really available in the United States. Now, something that's coming up around and the O USG product that I want to explain is this concept of redemption.

[00:05:20]And this is important because it came up also in this uh pilot that Ripple did with JP Morgan and so let's kind of lay it out real quick. Let's say you buy $10,000 worth of the OSG token. Well, O USG is a tokenized treasury product. So behind the scenes, Ando owns actual short-term US Treasury funds and you own a blockchain token that represents your claim on the exposure to that fund. So your token is kind of like a digital receipt or a wrapper around these treasury funds. And so redemption means you could basically send the O USG tokens back to Ono and the issuer Ono is going to burn those tokens and then the underlying value gets returned to you.

[00:06:14]And so that value could be in the term of dollars, it could be in terms of stable coins, but most likely or at least in the case of this other incident with Ripple and JP Morgan, it was via a bank transfer.

[00:06:27]So redemption is basically look, I don't want the token anymore, just give me the underlying value. And to show you how this works in other areas of the market, you have ETFs.

[00:06:39]And an ETF, right, represents ownership uh exposure to, for instance, a basket of stocks. And so you have the SPY, which represents exposure to the S&P 500. Now, most people never redeem ETF shares and really you just sell them on the market, but there are authorized participants that can redeem shares of the underlying basket of stocks. And so tokenization works a lot like that. You would, you know, turn in redeem that one share of the spy in return for the exposure that you had to the 500 stocks within it. Now practically once again that requires licenses and having enough money in it for that to actually make sense. And why redemption is important is because the token could technically drift away from the values of the underlying assets and trust can break down. And so redemption is basically what anchors the token back to real life. and it creates a mechanism that says this token actually corresponds to something real. Same thing for ETFs.

[00:07:51]And so O USG token really represents ownership in several different short-term US Treasury funds that when redeemed, you really would just get the cash back in most of these instances.

[00:08:08]Now throughout the entire Onondo ecosystem, there's also an actual protocol token called Ono.

[00:08:15]And this is a token that exists on the Ethereum blockchain as an ERC20 token.

[00:08:24]An ERC20 is just a token standard that's on the Ethereum blockchain that says basically this is a fungeable token on Ethereum. meaning uh one ono is one ono whereas you have other token standards on Ethereum that are created for nonf fungeible tokens for instance uh like NFTTS where you have a unique identifier for each token uh think about it like a collectible in a game as an example uh or your character in a game if you customize it a certain way there's only one of one And you could, for instance, trade that character if it were an NFT on the Ethereum blockchain. But that's a lesson for another day. The point here is that the Onondo token exists on the Ethereum blockchain. They did not create their own blockchain. And the Onondo token is basically the governance and ecosystem token for the entire Onondo Finance ecosystem.

[00:09:26]Not the tokenized treasury product. It's not exposure to the stable coin. It's a governance token. When it comes to the tokconomics of Ono, you have 10 billion as the maximum supply and a current circulating supply of around 4.87 billiono.

[00:09:46]So, a little bit less than half. The breakdown of the supply goes like this.

[00:09:52]You have 52% that's allocated for ecosystem growth, 33% for protocol development, 13% dedicated to private sales, and 2% that's for the community and uh and public sales. So what this really means is that the majority of the token is really controlled by the foundation or the ecosystem structure.

[00:10:17]Uh which technically is great for them having the ability to essentially use that treasury to expand the ecosystem and to incentivize people to participate. But it's also worth noting that theo token does not necessarily have direct revenue sharing in it. It doesn't have, you know, any automatic cash flows that are going into the token as it stands right now or or any guaranteed yield that comes from Onondo products.

[00:10:50]And you know, that's a major difference between these other tokens within the ecosystem where you will actually innately earn a yield for holding it.

[00:11:00]but instead is more likely to gain value from the demand for the token in decentralized governance.

[00:11:09]So let's talk about what theo token actually does because really it serves as a governance token. It helps with ecosystem coordination.

[00:11:22]It can be used for protocol incentives and DAO participation.

[00:11:27]So the way that that works is you have a decentralized autonomous organization.

[00:11:32]When I say DAO, that's what I mean. And the way this works is that you have these different apps and things that are being built throughout the ecosystem.

[00:11:40]And as they are built, there are governance votes that happen on how these things will actually mechanically work. You got to think of it like open-source software that the holders of this token get to decide on how it proceeds to be updated.

[00:11:57]For instance, right now you have an app called Flux Finance, which is a decentralized lending protocol where you can lend and borrow stable coins against tokenized US treasuries. And this is essentially governed by the Ono Dao or the Ono decentralized autonomous organization.

[00:12:16]So if there is an increased desire to have control or a say in how proposals to change uh flux finance go or any other apps that are built within theo dowo ecosystem then you could see increased demand for theo token. Now, as always, demand has to be weighed versus the supply. And considering how much of the supply is in the hands of the team, you do have to keep that part in mind because uh well as the team decides to as a team uh has their vesting periods end, meaning that they have an unlocking of the tokens. Well, when that happens, they're very likely to sell them. You see this also with stocks when um executives are able to sell, right? What do they do? They they sell. And so, you just have to keep that a part of all of this when you're thinking about the tokconomics of the ecosystem. There are also other things that can lead to, you know, releases of the token. for instance, with the Treasury uh releasing things based upon the Dow voting on what comes next with the Treasury and only half of the total supply of the token is in circulation at the moment. So, you just have to keep that in mind when thinking about the supply and demand and therefore the price of these types of tokens. So theo token is more like a bet on the value of the entire ecosystem.

[00:13:45]Whereas O USG and USDY are more like a more traditional sort of offering and that they have some sort of a yield that they're also providing.

[00:13:58]Now, I'm not a financial adviser and none of this is financial advice. And I highly recommend that you do not take financial advice from a random guy walking around a park talking to a stick.

[00:14:12]Hondo has built a very solid barrier around them for what they're doing by collaborating with some of the largest financial institutions in the world in what they're doing and also building out technology that's very specific for the use cases that they are doing. And when it comes to looking at Ono as a whole, I mean, the project does have a chance to be pretty successful while the Onondo governance token itself may not be directly tied into the success of the entire Ono ecosystem. And this is something that you can say about tons of different crypto projects to be fair. Overall, I do think that what Ando is doing is very special. But I also think you'll definitely want to hear what I have to say about the other projects in this series comparing Onondo to Ripple and XRP and to the Canton network. So, be sure to like this video and subscribe and let me know in the comments if you want me to continue this series. Now, if you're still on the sidelines when it comes to all of this stuff, when it comes to digital assets and crypto, and you don't know where to start or you're looking for places, but you know, you can trust the the venues that you're dealing with when you're buying and selling crypto, I highly recommend that you create an account with Caleb and Brown. They are a fullervice crypto brokerage where you can actually speak to someone when you're making decisions about buying and selling. And you can actually find the link to Caleb and Brown in the description of this video. Click that link, sign up for a free account and get in touch with your broker after you verify your account. Now, in case you want to speak to my contact over at Caleb and Brown, I'm also going to leave Jim Bazani's email in the description of this video. You can shoot him an email, say, "Hey, Keith D sent me. Wanted to learn more about what you guys are doing." Another thing that I do wish more people understood in this world of investing has to do with a partnership that I just formed with iTrust Capital.

[00:16:18]And the way this works is that most people when they're buying and selling crypto, they're usually doing it only in regular crypto brokerage accounts. And every time you sell for a profit, you're going to be getting taxed on that.

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[00:17:02]And if you're already buying crypto, then having your crypto in a retirement account is something that just becomes an obvious thing to do so that you don't have to have all of your portfolio subject to capital gains taxes. And it's worth noting that you can also roll over your current 401k into an ITR capital account if you want. and it can allow you to have a little bit more autonomy and different options when trying to figure out what you want to do. So, if any of that sounds interesting, I highly recommend that you click the link in the description to sign up for a free account with iTrust Capital. And when you do and you meet the funding requirements, you will get a free $100 bonus over at iTrust Capital. But anyways, what did I miss? What did I get wrong? Or how could I be looking at all of this differently? Let me know in the comments down below. If you ever want access to deeper insights on what I'm doing with this kind of information, I highly recommend that you subscribe to my channel memberships, the macro analyst tier members get access to exclusive videos where I go over this type of information in much more depth and I do a weekly preview as well as have a private discord where we're having some of these discussions as well. You can find that at the link in the description of this video. But anyways, I'm Keith D here to talk everything money and markets. And if you got anything from this at all whatsoever, be sure to hit that like button and subscribe. And until next time, peace.