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Introduction

Ondo Finance is an open, permissionless, decentralized investment bank.

Ondo's core business is to service and connect various stakeholders in the emerging DeFi ecosystem - including DAOs and increasingly institutional and mainstream retail investors - through fully on-chain services.

Ondo is both a bundler and an unbundler of DeFi products and services. We bundle together financial products from many protocols (and soon from across many blockchains). We then repackage and decompose these pools into exposures that fit what different types of investors are looking for. In doing so, we increase the amount and diversity of capital supply that DeFi is able to absorb.

Business Model

The business model of Ondo is to intermediate and matchmake capital supply and demand.

Ondo differs from a traditional investment bank in a few important ways:

  • Ondo creates financial products from DeFi building blocks, meaning they execute according to open source code rather than opaque prose legal agreements. This avoids the need for back office staff and countless intermediaries and makes it possible for Ondo to provide its services at almost no marginal cost, making them accessible to even small investors.
  • Ondo's products interoperate with and typically sit on top of existing DeFi products, allowing for frictionless value transfer.
  • Ondo will be governed as a DAO and owned by a distributed set of participants, including by many of its users.
  • As a DAO, Ondo will have an incentive system to enable anyone to create a product or service or otherwise add value to the Ondo ecosystem and be rewarded for it. However, the DAO will still curate products in order to safeguard users.
  • Ondo has no investment minimums. Retail can access the same products and services alongside institutions.

Ondo is a decentralized investment bank accessible that is owned by and exists to serve DeFi participants, including DAOs.

Aligning Incentives

Traditional investment banking is highly manual, expensive, and reliant on gatekeeping intermediaries. Products and services like structured products, direct listings, market making, and asset management are accessible only to the largest corporations and wealthiest investors. The financial agreements behind these offerings are executed behind closed doors. The institutions that underwrite them are systemically important, with dubious histories in risk management.

We believe that sophisticated, customized financial products and services should be available to all businesses and investors. DeFi makes it possible for certain financial services to be offered at almost no cost to the marginal investor. Instead of relying on intermediaries like paying agents, transfer agents, and centralized clearing and settlement depositories, investors can rely on code to automate the performance of the terms and conditions of financial agreements.

As such, we have leveraged the power of DeFi to develop software that democratizes investment banking services.

A few growing trends have led to the need for a decentralized investment bank:

  • DeFi activity becoming increasingly fragmented across various layer 1 blockchains
  • The rise of DAOs, which need many of the same financial services that investment banks provide traditional corporations, like help with capital raising, going public, treasury management, etc.
  • Growing interest from institutional and mainstream retail investors to deploy capital to DeFi, while needing help navigating the ecosystem and creating diverse portfolios with defined risk

We are rolling out various services that comprise a decentralized investment bank. We started by creating structured products on Ethereum. We then expanded to market making and direct listing services under the "liquidity-as-a-service" umbrella. We will continue to expand these initiatives as well as roll out passive DeFi-native treasury management and asset management services.