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Real-world assets sector led by Ondo Finance is the best performer month to date
Even as memecoins have captured the spirit of crypto, protocols focused on real-world assets and tokenization such as Ondo Finance have seen the largest increase in their fully diluted market capitalizations, according to Artemis data.
Ondo Finance focuses on creating tokenized financial products, such as USDY and OUSG.
(Shutterstock/Poca WanderStock)
Posted May 29, 2024 at 1:14 PM EST.
While memecoins have captured much of crypto users’ minds, real-world assets have been the best-performing sector of the crypto ecosystem thus far.
According to data from blockchain analytics company ArtemisThe fully diluted market capitalization of the real-world assets sector comprised of governance tokens from three projects – Ondo Finance, Clearpool and Maple Finance – has increased by 53.5% since May 1, ahead of the following sectors: memecoins, decentralized finance and oracles.
“In general, investors are optimistic [on] RWA releases ETH ETF approval as it considers what this unlocks,” wrote crypto investment firm Modular Capital co-founder Vincent Jow in a direct message to Unchained on X.
However, since Artemis’ chart is weighted by fully diluted market capitalization, RWA’s monthly performance is “heavily biased by one token”, namely Ondo Finance’s governance token, ONDO.
The three projects in Artemis’ RWA sector have a combined total diluted valuation (FDV) of $12.2 billion and Ondo Finance is responsible for 97% of the sector with a FDV of almost $11.9 billion. Clearpool’s FDV stands at almost $187 million, while Maple’s is around $147 million.
ONDO rose more than 54% in May to trade at $1.20 at press time. CPOOL, Clearpool’s stakeable governance token, rose 25% to hover around 19 cents, while Maple Finance’s MPL governance token surged 24% to $14.67 during the same period, according to CoinGecko.
Learn more: What is real-world asset (RWA) tokenization? A beginner’s guide
“Ondo also has a relatively low outstanding market capitalization compared to a fully diluted capitalization, which also skews the figure,” Modular Capital’s Jow added. A protocol’s market cap is the number of tokens currently in circulation multiplied by the price of a single token, while a project’s FDV is the theoretical market cap of the project if all tokens were circulating in the market.
The outstanding market capitalizations of Maple and Clearpool’s governance tokens represent 78% and 60% of their FDV, respectively. In contrast, ONDO’s market capitalization of $1.7 billion represents less than 14.5% of its FDV.
In terms of total value locked, Ondo Finance remains the most popular parking spot of the three projects, as crypto users have locked $470 million in total value in Ondo Finance, $4.6 million in Clearpool and $1 million in Maple Finance, according to DefiLlama data.
While Clearpool and Maple Finance’s TVL remained relatively stable and did not see substantial growth in May, Ondo’s TVL increased by $117.85 million month to date, up from $352.67 million of dollars.
The role of Ondo Finance in the RWA sector
Ondo Finance is a real-world tokenized assets platform that offers two flagship products: USDY for individuals and OUSG for individuals who meet specific “qualified buyer” requirements. According to Per Ondo Finance documents, USDY “is a tokenized note collateralized by short-term US Treasury bills and bank demand deposits”, designed to act as a stable currency with a yield denominated in US dollars, while OUSG “provides liquid exposure to short-term US Treasuries with 24/7 tokenized subscriptions and redemptions.
Ondo propelled the RWA sector to become the best performing sector in May, according to Artemis, while Ondo Finance applied earlier this month to Arbitrum’s Treasury Stable Endowment Program, which aims to diversify 35 million ARB tokens into real-world stable assets backed by Treasury bills and money market instruments.
Ondo Finance is also connected to BlackRock’s BUIDL fund, which has a market capitalization of $473 million. According to its filings, a “significant majority” of Ondo’s OUSG portfolio is currently in BlackRock’s BUIDL fund. Additionally, data from the Etherscan blockchain explorer watch that Ondo Finance holds 10.5% of BUIDL.
CoinDesk reported in March 2024, Ondo transferred $95 million of its assets backing the OUSG token from BlackRock’s iShares Treasury Bond ETF to Blackrock’s BUIDL tokenized fund.
“The performance of the RWA space is somewhat predictable,” wrote Jim Hwang, COO at Firinne Capital, in a text message to Unchained. “We are starting to see the merging of real world and on-chain finance, which unlocks the potential of both areas.”
