real world assets are emerging as the next top narrative in the crypto Market the next big thing and this is not surprising given how much asset managers like Black Rock have been talking about tokenizing Assets in recent weeks what is surprising though is how much they have been getting involved in rwa cryptos and as a blue chip in this Niche Ono Finance stands to benefit particularly because it has close ties to the Trump Administration and that's why today we're going to explain what Ono Finance is how it works what it's planning and how high its
Ono token could go as a result spoiler alert it could have incredible potential my name is Nick stay tuned I'll start by saying that nothing in this video is financial advice it's educational content intended to inform you about Ono Finance I'll also note that nobody at the coin Bureau team holds Ono in their personal portfolios at the time of shooting but you can rest assured we will be as objective as possible as always if you want to know which cryptos we hold and which ones we're personally considering accumulating you can find out by becoming a
member of the coin Bureau Club that's where we do weekly deep dives into promising altcoins that could become big existing members will know that we covered a mantra da last June before it got big and since that time it has gone up by 10x and it's not the first altcoin gem we've found and and it definitely won't be the last so if you want to get early on the next big thing then become a member of the coin Bureau Club using the link down below with that said the history of Ono Finance begins with Nathan
alond and pinku suru Nathan got into crypto as a Trader during the 2017 cycle and traded crypto until 2019 when he joined Goldman sachs's digital Asset Division in 2020 Nathan dabbled in defi as part of his work at the mega bank but of course Nathan didn't want to just double he wanted to ape in something that he couldn't do due to things like strict regulations he eventually decided to launch Ono Finance in 20121 and it initially focused on making D5 protocols more Capital efficient through Arbitrage and other such activities it seems that it wasn't until
2022 that Ono Finance started turning its focus towards real world assets and this could explain why pinku left around that time like Nathan pinku had been dabbling in crypto since the 2017 cycle and were worked at Goldman Sachs prior to founding Ono Finance the difference is that pinku was a blockchain developer and not a Trader and apparently he wasn't at all interested in rwas in any case before pivoting to rwas Ando had raised $4 million from VCS in 2021 it raised an additional $20 million from Top tier crypto VCS in 2022 including Peter Teal's Founders
fund uh for context Peter has been heavily involved in the Trump Administration both indirectly as part of the so-called PayPal Mafia and directly by reportedly bankrolling JD Vance's political career and you can learn more about that using the link in the description now HTO Finance went on to raise an additional $10 million in a coin list sale in 2022 this put it in the perfect position to finance its rwa Ambitions which became evident in early 2023 with the launch of its tokenized treasuries and corporate bonds by mid 2023 Ono Finance had launched its usdy stable
coin as you might have guessed usdy is a stable coin backed by US Government debt and earns a yield from the US treasuries that back it for reference most stable coins are backed by US Government debt however usdy is one of the few that shares some of the yield with token holders usdy has since become Ono finance's Flagship product along with o USG its tokenized treasury offering and notably usdy is almost twice as long L as o USG and this is partially a consequence of the differences in requirements around investing in usdy versus o USG
which we'll explain in a bit USD y's growth also appears to be due to Ono Finance doubling down on its growth over the last year or so it's expanded to over a half a dozen blockchains including non-m chains like sui and salana it has also started targeting more use cases like trading savings and payments most importantly under Finance has been integrating with other crypto projects and protocols that are positioning themselves for payments uh such as PayPal's py USD stable coin another thing Ono announced last November was its integration with layer zero to take usdy cross
chain for those unaware layer zero is one of the few crypto projects that PayPal has invested in and it's also using its interoperability protocol to take its py USD stable coin cross chain and I'll remind you that the so-called PayPal Mafia has a strong presence in the Trump Administration when you combine this with the fact that Trump's ADI protocol World Liberty Financial purchased some Ono tokens last December that Ono Finance sponsored Trump's inauguration and that the Trump Administration is in the process of passing regulations favorable to stable coins and rwas it paints an extremely bullish
picture for Ono and by the way guys if you enjoyed this video so far be sure to smash that like button to let us know and you'll want to subscribe and ping the notification Bell as well to make 100% sure you don't miss the next one now this ties into how Ono Finance Works per its documentation Ono Finance consists of two arms its Asset Management arm and its technology on together these two manage Ono finances two products which you'll recall are usdy stable coin and O USG tokenized treasuries both products are available on multiple chains
but mainly e eum interestingly though usdy trades mostly onu hm obviously accessing these products requires being onboarded by Ono Finance which includes not just kyc but also an assessment of your net worth depending on the product usdy is accessible to all non us individuals and organizations while o USG is restricted to all qualified investors AKA Rich folks uh specifically a net worth of over $5 million as an individual or assets of over $25 million as an institution both products can be minted using dollars or stable coins and can be redeemed for dollars or stable coins
with usdc being the only supported stable coin for the time being a PUSD will likely follow given their relationship what's interesting is that each product comes with its own peculiar limitations in the case of usdy the token is only minted and becomes available after 40 to 50 days but can be transferred to any wallet in the case of O USG it can be transferred immediately but the token can only be transferred to whitelisted wallets in other words usdy is permissionless and O USG is permissioned both products also come in two settings accumulating or rebasing the
default usdy and O USG tokens are accumulating meaning that their prices increase gradually in accordance with their yield rusdy and R USG are rebasing meaning that the price stays the same but the quantity of the tokens you hold increase in accordance with their yield Ono Finance users can seamlessly swap between the two besides their limitations the primary difference between usdy and O USG is how they're backed USD is backed by short-term us treasuries offered by asset manager Stone X these res reses are managed by Morgan Stanley and Ono Finance keeps usdy 3% over collateralized to
account for any Market volatility for those unfamiliar short-term us treasuries AKA short-term government debt is extremely liquid meaning it can be traded in large amounts without moving the price much and this is why short-term us treasuries are referred to as cash equivalents uh their price stays stable compared to other assets like most stable coin issuers Ono Finance provides daily and monthly attestations of the reserves back in usdy which I should note are not the same as an audit unlike most stable coin issuers though Ono finance's usdy stable coin is regulated by finsen as of March
last year making it slightly more legit the catch is that Redeeming the usdy stable coin apparently isn't a very smooth process Ono finance's documentation specifies that redeeming usdy for stable coin or F fat involves submitting a request and that processing this Redemption can take up to five business days and not only that but early redemptions I.E redeeming before usdy is minted and becomes transferable quote may take a bit longer this is in stark contrast to O USG which is backed mainly by black Rock's Biddle fund which is a tokenized money market fund on multiple chains
although mainly on ethereum and FYI money market funds are basically stable coins for institutions like stable coins they're backed by short-term US Government debt unlike stable coins money market funds earn a yield and hence why they're so popular regardless aside from black rocks Biddle o USG is backed by black rocks fed fund fund and usdc which makes sense given that usdc reserves are also managed by Black Rock This Arrangement makes it possible for o USG to be minted and redeemed instantly for usdc 247 the catch in this case is that instant Redemption is limited to
$50 million every 24 hours with a $25 million limit for single users obviously o USG can also be minted and redeemed for us and Ono finances documentation specifies that minting and redeeming take just one business day uh to be fair this appears to be a consequence of the arguably unfair Financial regulations for accredited versus non-accredited investors on that note you might have noticed that I haven't mentioned anything about the Ono token yet and this is because Ono finances products and the Ono token are two separate things legally speaking whereas Ono Finance is owned and operated
by Ono Finance Incorporated a software company in New York the Ono token is governed by the Ono Foundation a nonprofit based in the cman islands and this relates to Ono's tokenomics Ono is an erc20 token on the eum blockchain it's used to govern Ono finance and flux finance a defi lending and borrowing protocol that leverages Ono's products oddly enough though there have apparently been no governance proposals for either protocol for over a year and Ono does not seem to have any other utility at least at the time of shooting whatever the case Ono has a
maximum supply of 10 billion which was allocated as follows roughly 15% to investors 33% to protocol development which appears to include the team and 52% to ecosystem growth the Ono token effectively launched in January 2024 after a governance vote the vesting schedule for Ono can be seen right over here you'll notice it has large vesting Cliffs occurring roughly once per year after the token launch and you'll also notice that the allocations to early investors and the team are locked for the first 12 months which is uh fascinating as the first vesting Cliff just happened what's
crazy is that you can clearly see this vesting Cliff when looking at Ando through the lens of market cap ando's market cap has more than doubled in the last week of January which is truly crazy the good news is that the next vesting Cliff won't occur until January next year uh the bad news is that there could be a change to tokenomics that allow for insiders to maximize their returns much sooner for example it's possible that Ono Finance could announce staking rewards for Ono holders including those with Ono that still invest in similarly the protocol
could be adjusted to allow for a buy back and burn of tokens make no mistake something along these lines is likely given all of the changes in crypto regulations we've seen in the US Uno's potential ultimately depends on exactly that changes to crypto regulations in the US in case you forgot non- us individuals and organizations are not allowed to access the usdy stable coin under current regulations and this is something that could be easily changed under the Trump Administration especially since Ono Finance has connections to key players in the administration in our view allowing us
individuals and organizations to access the usdy stable coin could be massive because it's clear that it's objectively Superior to most stable coins in circulation it appears to have the most transparent reserves and offers a customizable yield set up for its holders usdy or rusdy in theory this makes usdy the ideal stable coin for things like payments savings and trading which I'll remind you are the areas that Ono Finance has been focusing on over the last year under the right regulatory environment usdy could experience exponential growth and this would create enormous revenue for Ono finance and
set the stage for some of this Revenue to ACC crew to the Ono token and this is why it's hard to figure out exactly how High Ono could go it depends on lots of factors that are currently unknown with that in mind though we reckon that Ono could hear me out be following tera's Luna one cycle behind now to be absolutely clear Ono Finance is absolutely nothing like Terror under the hood but in terms of how big Ono could grow as a result of usdy Luna seems to be the best analog from the previous cycle
to put things into perspective Luna hit a market cap of around $40 billion in 2021 and if Ono follows one cycle behind a $4 billion market cap would translate to an 8 to 9x from its current price at least at the time of shooting now that doesn't sound like much but it's a lot for a large cap crypto now whether Ono could pull a 9x or more fundamentally depends on its upcoming milestones and the closest thing that Ono Finance has to a road map is a blog post from January 2 24 it's not entirely clear
if these Milestones still apply so take them with a grain of salt they could change by the time you see this video the first Milestone is the launch of an onchain money market fund called om which apparently happened back in 2023 but is no longer noted on the Ono Finance website or its documentation it's possible that this is something Ono finance will bring back given the details of the second milestone naturally the second milestone is to bring more assets on chain not just bonds and now to our understanding this will be achieved with the help
of the new tool called Ono Global markets which was revealed last February and launched just last week in short Ono Global markets will make it possible to ensure that tokenized real world assets have enough onchain liquidity something necessary for RW to thrive the third Milestone relates to the second and that's to create more rwa specific infrastructure to ensure that the niche continues to grow the blog post doesn't specify what kind of infrastructure Ono Finance has in mind but it looks like most of the infrastructure will be provided by other protocols such as layer zero and
this brings me to the challenges that we foresee for Ono finance and the first challenge is well adoption as I noted earlier usdy is the ideal stable coin at least in theory in practice Network effects are the most important factor for for stable coins and usdy is going to have a very hard time competing with usdc and usdt on this front and that's simply because usd's primary appeal is that it can earn a yield the thing is that you can also earn a yield on usdc and usdt by lending it out in defi protocols unless
the demand for usdc and usdt somehow Falls the yield for Lending it out will always be higher than from holding USD y which will probably not be lent out very much since borrowing a yield bearing stable coin means debts rise faster when you realize that PayPal's py USD stable coin is likely to dominate payments you understand that the only real utility that usdy could offer is as collateral in defi to borrow other stable coins like usdc or as collateral on centralized exchanges for margin trading which is one place where usdy could dominate this ties into
Ono finance's Second Challenge though and that's the sustainability of yields now if you think about it the main reason why tokenized treasuries have become so popular is because interest rates have been rising in recent years not sure if you've noticed but interest rates are slowly starting to come down barring a Resurgence in inflation the FED is likely to continue cutting interest rates and this will make usdy and O USG gradually less appealing to investors the Silver Lining is that Ono Finance could mitigate against this by expanding its tokenized rwa offerings and it seems to be
planning to do just that and this relates to Ono finance's third challenge though and that's the competition it faces outside of stable coins and tokenized bonds in case it wasn't clear enough Ono seems to be leaning heavily on usdy and O USG for its success and this could prove to be a suboptimal strategy for the reasons I just noted and as I just noted Ono Finance could mitigate against this by expanding its tokenized rwa offerings but this would then put it in competition with other crypto projects that have been working on tokenizing other assets for
much longer than Ono Finance has the silver lining in this case though is that there actually don't seem to be very many crypto projects tokenized in assets outside of US Government debt the result could be that Ono Finance gets a first mover advantage in a niche that currently doesn't have very much competition like tokenized stocks for example again it seems that this is something that Ono Finance is planning on doing or at least was early last year and I'll repeat that with the right regulations Ono could experience exponential growth with just the products it currently
has all things considered though it definitely is an rwa Blue Chip and one worth watching however if you're looking for an rwa crypto that could 50 or 100x Ono probably isn't yet and if you've been paying attention you'll know where you can find those kinds of crypto projects and if you missed it it's the coin buau Club the link to sign up will be down below now if you enjoyed that video be sure to watch our latest one right over here and if you're not subscribed yet then you can do that right over here that's
me for now thank you for watching and I'll see you next time [Music]
