Ondo’s Tokenized Treasury Product Just Passed BlackRock’s BUIDL. Is ONDO Undervalued?
RWA Signal Insight
U.S. TreasuriesOndo Finance's tokenized Treasury product, USDY, has surpassed BlackRock's BUIDL fund in total assets, reaching approximately $2.33 billion compared to BUIDL's $2.2 billion. Despite this growth in tokenized assets, the ONDO governance token has faced significant market pressure, declining 9% during the week ending October 17, 2026, and trading 79.5% below its all-time high. The article highlights a critical disconnect between the success of Ondo's RWA products and the value of its governance token, as ONDO holders possess no legal claim to USDY reserves, company equity, or platform fees. Furthermore, Ondo remains deeply integrated with BlackRock, as USDY portfolios utilize BlackRock-managed ETFs and Ondo's OUSG fund acts as a client for BUIDL. With 5.13 billion ONDO tokens yet to be unlocked, the potential for supply-side dilution remains a concern for investors. While Ondo has expanded its regulatory footprint through the acquisition of Oasis Pro, these institutional advancements do not currently provide direct economic benefits to ONDO token holders. The market performance underscores the importance of distinguishing between a protocol's underlying RWA product growth and the utility of its associated governance token.
Key points
- USDY reached $2.33 billion in assets, surpassing BlackRock's BUIDL fund.
- ONDO governance tokens provide no claim to platform revenue or underlying asset reserves.
- Ondo Finance utilizes BlackRock's SHV ETF and BUIDL fund within its own product portfolios.
- Approximately 5.13 billion ONDO tokens remain locked, representing future supply dilution.
Background
Ondo Finance is a protocol focused on tokenizing real-world assets, primarily U.S. Treasuries, to provide yield-bearing products for the crypto ecosystem. Its flagship product, USDY, is a tokenized note backed by short-term Treasuries and bank deposits, designed to offer stable, yield-generating collateral for decentralized finance applications.