Ondo Finance Dominates RWA Tokenization: 2025 Boom or Bust?

With the $24.7 billion RWA tokenization market surging, a May 2025 Mint Ventures report crowns Ondo Finance a leader, commanding a 17% share with $11.7 billion in assets. Its OUSG and USDY products, regulatory savvy, and 2025 roadmap face fierce competition and hurdles, shaping the future of on-chain finance.

Ondo Finance: Leadership in RWA Sector

Ondo Finance has emerged as a frontrunner in the real-world assets (RWA) tokenization space, capturing significant attention in a crypto market searching for new narratives beyond the declining meme coin trend.

According to a Mint Ventures report dated May 15, 2025, Ondo holds the second spot in the U.S. Treasury-backed RWA market with a 17.01% market share, managing $11.7 billion in locked assets. This places it just behind Securitize, which leads with $29.12 billion and a 42.11% share, as per data from RWA.xyz.

Additionally, its engagement with regulators, including an April 2025 meeting with the SEC’s Crypto Asset Working Group to propose a compliance framework for tokenized securities, underscores its proactive approach to navigating the evolving regulatory landscape.

Ondo’s Core Products Drive Adoption

Ondo’s flagship offerings, OUSG (Ondo Short-Term US Government Bond Fund) and USDY (US Dollar Yield), are central to its growth.

The Mint Ventures report highlights that OUSG, targeting qualified investors, manages $545 million in assets, primarily on Ethereum with 57 holders, where the top 10 addresses control over 90% of the supply.

Meanwhile, USDY, a yield-bearing stablecoin aimed at non-U.S. retail and institutional users, has amassed $634 million in assets across eight blockchains, including Ethereum and Solana. Notably, USDY boasts 6,329 holders on Solana with a market cap of $177 million, reflecting strong retail adoption.

Both products leverage U.S. Treasuries for stable returns, with USDY offering daily yield accrual at a 4-5% annualized rate, adjusted for a 0.5% management fee, making it a popular choice for investors seeking passive income without staking or locking funds.

The two differ in terms of product positioning. USDY emphasizes open circulation, catering to retail demand and functioning as a stablecoin, whereas OUSG focuses on immediate liquidity within a restricted environment, targeting institutional needs as a fund share. This strategic differentiation strengthens Ondo’s appeal across diverse investor groups.

Ondo’s Strategic Advantages and Market Optimism

Ondo Finance stands out in the RWA sector, leveraging its extensive ties with traditional finance ecosystems to boost its brand prominence. Through strategic product collaborations and well-executed PR efforts, Ondo has skillfully secured indirect endorsements from financial heavyweights like BlackRock, Morgan Stanley, and Fidelity. For instance, BlackRock’s BUIDL fund serves as an underlying asset for OUSG, and despite no formal partnership, this association led the market to briefly view Ondo as a “BlackRock concept coin.” Additionally, top-tier asset managers like Franklin Templeton and Wellington have joined the Ondo Nexus program, contributing their Treasury products to enhance Ondo’s ecosystem, while partnerships with PayPal and Mastercard further elevate its credibility.

This approach to bridging traditional finance and crypto markets has positioned Ondo as a leader in the space. Market confidence in Ondo is evident through its token metrics: with a total supply of 10 billion ONDO tokens and 31.6% in circulation, its circulating market cap reaches $3.27 billion, outstripping peers. The ONDO/CFG market cap ratio of 40x, compared to a TVL ratio of 2.7x, underscores the market’s strong belief in Ondo’s long-term potential, particularly its vision of becoming an “on-chain Wall Street 2.0” through initiatives like Ondo Chain.

Intensifying Competition and Challenges for Ondo

The RWA sector is becoming increasingly competitive, with players like Securitize and Centrifuge posing significant challenges to Ondo’s dominance. Securitize, backed by BlackRock, leads the market with $29.12 billion in locked assets, while Centrifuge, focusing on private credit RWAs, has seen explosive growth—its locked assets surged 222.66% in a month to $409 million, as noted in the report.

Ondo’s advantage over other Web3 projects is less pronounced against TradFi giants like BlackRock, which may build their own ecosystems to dominate RWA’s lucrative market, potentially sidelining emerging players like Ondo.

Additionally, Ondo’s core protocols, such as Global Markets and Ondo Chain, remain undelivered, raising doubts about its ability to meet product, operational, and compliance challenges upon launch.

Regulatory uncertainty further complicates the landscape; despite a crypto-friendly U.S. administration, the failure of the GENIUS Act stablecoin bill highlights legislative hurdles, and the 2026 midterm elections could shift the regulatory outlook if asset tokenization laws aren’t passed beforehand.

Moreover, Ondo faces token-related risks, with a low 34% circulation rate and a looming 64% inflation rate over the next year, creating significant potential selling pressure, while the ONDO token’s value capture remains unclear due to the lack of a clear fee distribution or buyback mechanism.

Ondo Chain and Global Markets Await Launch

Ondo’s visionary projects, Ondo Chain and Global Markets, which aim to tokenize stocks and ETFs for seamless 24/7 trading, are currently in development and slated for launch later in 2025, contingent on clearer regulatory frameworks.

Investors and stakeholders should closely monitor several pivotal factors that could impact Ondo’s trajectory and token price: the deployment of Ondo Chain’s mainnet and testnet, the rollout of Global Markets, the introduction of new RWA asset categories, deeper ties with institutional partners, and sustained asset growth.

Additionally, external dynamics such as U.S. asset tokenization legislation progress, the SEC’s stance on a potential “regulatory sandbox” for pre-legislation innovation, and whether traditional finance giants will enter the space with their own platforms—potentially turning the RWA blue ocean into a fiercely competitive red ocean—will be critical to watch.