ONDO holders personal no declare on USDY’s $2.33 billion in reserves, no fairness in Ondo Finance, and no share of its charges.
Solely 49% of ONDO’s whole provide circulates at the moment, with 5.13 billion tokens nonetheless set to unlock and strain the value.
Regardless of USDY surpassing BUIDL, BlackRock nonetheless earns charges as a result of Ondo holds OUSG reserves inside BUIDL and makes use of a BlackRock-managed ETF in USDY’s portfolio.
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Ondo Finance’s tokenized Treasury product, the Ondo US Greenback Yield token (USDY), has surpassed BUIDL from BlackRock (NYSE:BLK) in dimension. Regardless of this achievement, the Ondo (CRYPTO:ONDO) token fell 9% in the course of the week ending October 17, 2026. USDY at present holds about $2.33 billion, barely greater than the $2.2 billion held by BlackRock’s tokenized fund.
ONDO is buying and selling at round 44 cents, down 3% in in the future. Its weekly drop is significantly steeper than the 1.7% decline in Bitcoin (CRYPTO:BTC) and the three.4% dip in Ethereum (CRYPTO:ETH). ONDO is now 79.5% under its all-time excessive of $2.14, reached on December 15, 2024. Whereas the USDY product continues to develop, the ONDO token’s worth retains falling. Does this enhance in USDY recommend that ONDO is undervalued?
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USDY Pays Yield to Its Holders, Whereas ONDO Gives Solely Governance
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USDY is a yield-bearing token backed by short-term US Treasuries and financial institution deposits, as Ondo states on its product web page. Legally, USDY represents debt from a separate entity, which ought to defend its reserves from Ondo’s collectors if Ondo Finance faces monetary difficulties. Notably, USDY is offered beneath Regulation S, which suggests solely non-US consumers can buy it.
In distinction, ONDO serves as a governance token. Holders of ONDO tokens have the fitting to vote on proposals for the Ondo DAO, the group group overseeing elements of the platform. Whereas consumers can create and redeem USDY utilizing {dollars} or stablecoins, ONDO has no position in that course of. The $2.33 billion in USDY belongs to its holders.
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Ondo generates income from the distinction between two yields: one yield paid to USDY holders and one other earned by the portfolio backing USDY. Nonetheless, Ondo Finance is a personal firm that doesn’t disclose how a lot of this yield hole contributes to its income.
The one connection between Ondo’s enterprise and the ONDO token is its governance operate. In June, a group member proposed a temperature examine on the Flux Finance governance discussion board about utilizing a part of Ondo’s income to purchase again and get rid of ONDO tokens. The publish clarified that this was solely a temperature examine, not a binding on-chain proposal.
Ondo’s US Enlargement Depends on USD and Stablecoins, Not ONDO
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Ondo additionally operates OUSG, a tokenized Treasury fund designed for certified buyers, together with Ondo World Markets. The BVI unit of Ondo points tokenized notes that monitor US shares and ETFs for non-US buyers, with dealer Alpaca holding the underlying shares. In a letter despatched to the SEC on April 13, Ondo sought no-action reduction, indicating that it goals to document these positions on Ethereum’s predominant community, with BitGo safeguarding the tokens.
A big regulatory development for Ondo was buying Oasis Professional, which gave it an SEC-registered broker-dealer, an alternate buying and selling system for matching consumers and sellers, and a switch agent to trace possession of every safety. On July 23, Oasis Professional Markets obtained FINRA approval to supply tokenized shares and funds to US buyers.
Nonetheless, Ondo’s announcement of this approval mentioned trades might settle in fiat currencies or “supported stablecoins” and didn’t point out ONDO. Thus, Ondo’s regulated operations within the US might proceed to develop with out creating demand for ONDO.
BlackRock Continues to Earn Charges Whereas USDY Leads BUIDL
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Claiming that Ondo is a direct rival to BlackRock could also be overstating the competitors. In March 2024, Ondo transferred its OUSG reserves into BlackRock’s BUIDL fund, making it a BUIDL consumer. Moreover, USDY’s portfolio contains an Ondo-tokenized model of the iShares 0-1 Yr Treasury Bond ETF (NASDAQ:SHV), which is managed by BlackRock. So, whilst USDY grows previous BUIDL, BlackRock nonetheless earns charges as Ondo grows.
Furthermore, the 2 merchandise serve totally different consumers. BlackRock developed BUIDL in partnership with Securitize for giant establishments, whereas USDY appeals to non-US people and organizations, in addition to to crypto lending and buying and selling purposes that settle for it as collateral. Presently, USDY’s lead over BUIDL is kind of slim, at roughly $130 million to $160 million relying on the rely, which means a single giant deposit into BUIDL might change their rankings.
ONDO’s Market Cap Excludes 5 Billion Tokens But to Be Launched
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Presently, ONDO’s market cap is about $2.13 billion, lower than USDY’s. Its totally diluted valuation, which elements in all 10 billion tokens that can ever exist, is about $4.38 billion. This makes ONDO seem extra inexpensive than USDY. Nonetheless, this comparability mistakenly treats buyer deposits as in the event that they belong to token holders.
The availability additionally impacts the value. Of the ten billion ONDO token most, about 4.87 billion are at present in circulation, which means solely 49% of the whole provide is out there. Ondo nonetheless has 5.13 billion tokens to launch, which might additional have an effect on market dynamics.
Is ONDO Undervalued Now That Ondo’s Tokenized Treasury Leads BUIDL?
No. USDY’s development would not make ONDO undervalued as a result of ONDO holders don’t have any declare on USDY’s reserves, no possession stake in Ondo Finance, and no declare on the corporate’s charges. Holding ONDO for the tokenization theme buys a vote on Ondo’s path, however no share of its money stream, and 5.13 billion tokens nonetheless must unlock.
We might change our view as soon as a binding fee-switch proposal passes an on-chain vote and Ondo begins utilizing its income to purchase again ONDO. Till then, USDY might continue to grow previous BUIDL whereas ONDO lags Bitcoin, because it did the week ending October 17.
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