Trust & Security
When dealing with money, trust and security are always important. In crypto, these issues are even more top of mind. We therefore wanted to highlight a few ways we are committed to maintaining your trust and the security of your funds.
Finance is a team sport. Even within TradFi, setting up and operating any given fund involves many parties: asset managers, custodians, fund administrator, counterparties, lawyers… and the list goes on. In on-chain finance that list only gets bigger, particularly as we are setting up funds that invest on-chain capital into real-world assets. Who one partners with, then, matters.
At Ondo, we work with only the most reputable, well-established partners across all functions. For example, take our fund, OUSG, which invests in an exchange-traded fund (ETF) backed by short-term US Treasuries. The USDC you invest is custodied—and then exchanged for USD—by Coinbase, one of the leading crypto asset custodians. Once the fund buys shares in the ETF, those shares are custodied at Clear Street through its account at the DTC (Depository Trust Company), where US exchange-traded securities are settled. The ETF itself is managed by BlackRock, the largest asset manager in the world, with $10 trillion under management (roughly one quarter of all the money in circulation today). The Treasuries themselves are custodied at one of BlackRock's preferred custodians: BNY Mellon, Citi, JP Morgan, and State Street. And of course, US Treasuries are backed by the full faith and credit of the United States government, which is still considered to be the most risk-free asset in the world.
The details for our other funds differ but the principle is the same: high quality institutional partners, always.
Transparency & Disclosure
We believe the standards for transparency and disclosure in on-chain finance should meet or exceed those in TradFi. While we may choose to keep some things proprietary for competitive reasons, whenever possible we strive to err on the side of transparency when it comes to our published products and protocols. As an example, if you visit the product page for any of our funds, you will find detailed information on all relevant dimensions, including the strategy employed, the underlying portfolio composition, current portfolio pricing, historical performance and risk, as well as the results of periodic fund audits. On the technical side, we will be transparent about the audit status of any material code. Finally, Ondo and its related entities regularly undergo financial and information security audits, which are shared with authorized requesting parties.
Legal & Regulatory Compliance
Ondo takes legal and regulatory compliance seriously. We make significant effort to design our products in a way that complies with those laws and regulations where we intend to do business. Because the existing legal and regulatory regimes are often ambiguous, however, there still exists some uncertainty on what actions to take or disallow, and how to do some in ways that are practical given the nature of DeFi. In cases of legal or regulatory ambiguity—or in cases where the way to best abide by such regulations in a DeFi context is unclear—we typically consult with multiple legal and regulatory experts and take a conservative approach.