Behind Ondo Finance's Surge: BlackRock, Morgan Stanley Explore the RWA Sector
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Behind Ondo Finance's Surge: BlackRock, Morgan Stanley Explore the RWA Sector
BlackRock bets on Ondo RWA U.S. Treasuries as traditional finance continues to double down on the RWA sector.
Navigating Web3 tides with focused insightsAuthor: Mia, ChainCatcher
Editor: Marco, ChainCatcher
Recently, a proposal from the Ondo Foundation—the organization behind RWA protocol Ondo Finance—regarding the unlocking of ONDO tokens was approved by vote. The ONDO token officially entered full circulation on January 18. At the same time, Coinbase added Ondo Finance (ONDO) to its asset listing roadmap, and Binance quickly followed by launching ONDO 1-50x USDT-margined perpetual contracts.
According to data from CoinGecko, the ONDO token has surged over 300% since its launch on the 18th. In less than a week, ONDO's impressive gains have swept through the entire crypto community, becoming a hot topic of conversation among crypto enthusiasts on the X platform.
Following the unlock and subsequent price surge, controversy has emerged over suspected token dumping by the project team. As revealed by on-chain analyst @ai_9684xtpa, since ONDO’s listing, the team is suspected to have sold approximately 60 million ONDO tokens. Two addresses still hold 106 million ONDO tokens—about 7.79% of the circulating supply. Despite this significant selling pressure, the ONDO price has remained relatively stable around $0.25. This stability can be attributed to the strong appeal of RWA trends and institutional capital drawn to ONDO’s underlying real-world assets.
Ondo Finance and Its Backing Traditional Financial Giants
Even before announcing the token unlock proposal, Ondo Finance had already unveiled a community loyalty points program and announced collaborations with Mantle and Solana to bring USDY to their blockchains. Shortly after revealing the token unlock, on the 23rd, Ondo Finance announced an expansion into the Asia-Pacific region, opening its first office in Hong Kong. It also published an ecosystem directory on its official website, disclosing partners in liquidity, custody, and other key areas—including major traditional financial institutions such as Morgan Stanley, BlackRock, Ankura Trust, Clear Street, and NAV Consulting.
From its inception, Ondo Finance has received support from institutions like BlackRock and Morgan Stanley, along with investments from top-tier venture capital firms including Founders Fund, Pantera Capital, and Coinbase Ventures.
Crypto analyst McKenna publicly expressed optimism on social media about Ondo Finance becoming “the future blue-chip RWA asset,” stating that “Ondo Finance has already tokenized BlackRock’s iShares ETFs as short-term U.S. Treasury funds and innovated in stablecoin-backed cash equivalents.”
In March last year, BlackRock CEO Larry Fink stated in his annual letter to shareholders: “BlackRock will continue exploring the digital asset ecosystem, especially areas most relevant to our clients, such as permissioned blockchains and the tokenization of stocks and bonds.” BlackRock’s backing of Ondo undoubtedly provides it with a strategic entry point into the RWA space.
Currently, Ondo Finance has tokenized BlackRock’s Short-Term U.S. Treasury ETF—iShares Short Treasury Bond ETF (NASDAQ: SHV)—creating the OUSG (U.S. Treasuries) product, which is now the main contributor to Ondo Finance’s TVL. The current price of OUSG is $104.66, with an annualized yield of 4.69%. It can be purchased on Ethereum, Polygon, and Solana blockchains. As the ETF issuer, BlackRock charges a 0.15% management fee, while OUSG itself levies a 0.15% fund management fee. This collaboration stands as a successful case of traditional finance entering the RWA space. As BlackRock CEO Larry Fink put it, “The next generation of markets, the next generation of securities, will be the tokenization of securities.” With OUSG as the starting point, BlackRock has already taken its first step toward asset tokenization.
Financial Giants Rush Into RWA, Paving the Way for a Golden Era of Blockchain and Traditional Finance
Ondo may indeed become the “blue chip” of the RWA sector in the future. However, this isn’t the first time traditional financial institutions have ventured into real-world asset (RWA) tokenization. “Tokenizing all real-world assets to create liquidity for today’s illiquid assets” has long been the ultimate vision shared by developers in the crypto space.
An increasingly shared belief across both cryptocurrency and traditional finance circles is that the tokenization of real-world assets (RWA) will become the cornerstone of the next bull market, unlocking trillions of dollars worth of real-world assets and channeling them into the crypto economy.
Boston Consulting Group predicted that “the tokenized asset market could soar to $16 trillion by 2030,” while Citigroup estimated that “by 2030, there could be $4–5 trillion in tokenized digital securities, with trade finance transactions based on distributed ledger technology reaching $1 trillion.”
The tokenization of real-world assets (RWA) is expanding into areas such as bonds, automobiles, gold, and real estate—drawing growing interest and attention from traditional financial giants.
As early as 2021, investment giant Franklin Templeton launched its RWA experiment by introducing the Franklin OnChain U.S. Government Money Fund on the Stellar network, later expanding to Polygon in 2023. This fund became the first U.S.-registered mutual fund to use a public blockchain for transaction processing and share ownership tracking. Stellar provided fast, low-cost transactions and enabled decentralized issuance and exchange of assets.
The tokenization of RWAs is ushering in a new golden age for blockchain and traditional finance. Today, multiple institutions are advancing in parallel within the RWA space. Major traditional financial players—including JPMorgan Chase, Goldman Sachs, BlackRock, and Fidelity—are all actively exploring RWA initiatives.
JPMorgan launched its enterprise-grade blockchain platform, Onyx Digital Assets, in November 2020, aiming to tokenize ownership rights of money market fund (MMF) shares via its Tokenized Collateral Network (TCN), enabling asset managers and institutional investors to pledge or transfer MMF shares as collateral. Later, in October 2022, JPMorgan achieved tokenization of dollar deposits using JPM Coin on the Quorum blockchain.
Goldman Sachs launched its digital asset platform GS DAP last January. The platform is built on Digital Asset’s Daml smart contract language and the privacy-focused Canton blockchain. Its privacy protocols ensure data is only shared with authorized stakeholders, while supporting the scalability required for global connected assets.
Fidelity, having faced obstacles in offering Bitcoin accounts in its 401(k) plans, remains cautious and currently maintains a wait-and-see approach toward the RWA space.
Currently, Ondo’s short-term U.S. Treasury fund (OUSG) has a market cap of $111.5 million, ranking third behind Franklin Templeton’s Franklin OnChain U.S. Government Money Fund ($325.5 million) and Mountain Protocol’s USD (USDM) ($151.1 million).
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