- ONDO has come under the spotlight in crypto circles in recent weeks.
- The token has surged over 2,500% since a token unlock.
- This article explores ONDO’s recent rise to the limelight.
Ever so often in the crypto space, a new token emerges to capture the imaginations of crypto speculators.
In the latest instance, the new talk of the crypto town is a token called ONDO. The token has witnessed a staggering 2,500% rise following its unlock.
This article explores what ONDO is and why it is trending.
What Is the ONDO Token?
ONDO is the native token of Ondo Finance, a Coinbase-backed securities tokenization project that is promoted as offering better liquidity than traditional markets, and Flux Finance, a lending protocol built to allow DeFi natives a piece of the action by getting yields for lending their stablecoins to qualified investors who use the stablecoins to gain exposure to Ondo’s tokenized securities.
While a percentage of the token’s supply had already been in circulation largely thanks to a “Community Access Sale” that reportedly saw participation from 18,000 community members, these tokens were not transferable until a recent unlock on Thursday, January 18, effectively creating a market for them.
Following the token unlock, ONDO has already been listed for trading on exchanges like Bybit, KuCoin, and MEXC, with Coinbase also announcing listing plans.
The Function of the ONDO Token?
ONDO primarily serves as the governance token for ONDO DAO, which oversees changes to Flux Finance.
With ONDO set to play a crucial role in the Ondo Finance ecosystem and the growing hype around tokenization as an emerging crypto narrative, the token has garnered significant attention.
But this utility and tokenization hype may not be the only reason for the asset’s 2,500% jump from $0.01 at unlock to over $0.26 at the time of writing.
Per the project’s tokenomics, 52.1% of ONDO’s 10 billion supply has been allocated for “Ecosystem Growth,” including incentives like airdrops. To this end, the Ondo Foundation, tasked with growing the ecosystem, had established a points program, offering rewards for actions like holding on to ONDO and participating in governance.
Despite the perceived positives, some concerns around the project’s tokenomics have raised red flags amongst some investors.
‘A Ploy To Milk Retail?’
Despite hailing Ondo Finance as a project with a clear use case in an X post on Monday, January 22, prominent crypto trader “Duo Nine” contended that the ONDO token serves no purpose besides “milking retail.”
The analyst made this argument based on the supposed inflationary nature of the token. Per the project’s tokenomics, ONDO will have a maximum supply of 10 billion tokens to be fully unlocked over 60 months or five years, potentially diluting the token’s value over time.
In addition to this concern, ONDO allocates 45.9% of its token allocation to core contributors and investors, raising fears of these investors and developers dumping on holders.
ONDO has an estimated 1.4 billion tokens in circulation with a market cap of over $378 million, per CoinGecko data at the time of writing.
On the Flipside
- Gains like the ones experienced by ONDO after the unlock are rarely sustainable.
- Amid the hype surrounding ONDO, scammers have created a honeypot version on the BSC network.
Why This Matters
With ONDO dominating conversations in the crypto space, it is necessary to understand what the token is about and why it is trending.
Read this for more on tokenization:
Real-World Assets in Blockchain: How Can RWAs Liberate DeFi?
Learn more about the Manta Pacific airdrop:
Manta Pacific Airdrop Disappoints, Dev Dump Claims Swirl