Ondo (ONDO) Tokenomics

The ONDO token is an ERC-20 token on Ethereum with a maximum supply of 10.00 billion tokens. It serves primarily as a governance token for the Flux Finance protocol, which is governed by the Ondo DAO. The token's public launch occurred on January 18, 2024, following the release from a "Global Lock-Up."

Issuance Mechanism

The ONDO token has a fixed maximum token supply of 10.00 billion. The token was created on April 28, 2022.

Allocation Mechanism

The total supply of ONDO is distributed across several categories, including private sales, a community access sale, protocol development, and ecosystem growth.

Usage and Incentive Mechanism

The primary use cases for the ONDO token revolve around governance and participation in the Ondo ecosystem's incentive programs.

Governance

ONDO tokenholders participate in the onchain governance of Flux Finance (Flux) via Tally. Flux Finance is a peer-to-pool lending protocol governed by the Ondo DAO, which is a fork of Compound's Governor Bravo smart contracts.

• Proposal Submission: A user must have at least 100.00 million ONDO delegated to them to submit a proposal.
• Proposal Voting: Any user who self-delegates ONDO or receives delegations can vote.
• Quorum and Passing: For a proposal to pass, at least 1.00 million ONDO must be used to vote, and the quorum must be met. If passed, a one-day timelock precedes execution onchain.
• Scope of Proposals: Proposals can include changes to Flux, such as listing new fTokens (lendable/borrowable assets), pausing fToken markets, updating interest rate models, choosing a new admin, and managing Ondo DAO treasury assets.

Incentives and Rewards

The Ondo Foundation operates the Ondo Points Program, which was upgraded on March 12, 2024, to track points and enable point boosts. The foundation has not yet disclosed the specific future use of these points, only stating that "further rewards" will be announced.

Points can be earned through various actions, including:

• Holding ONDO tokens onchain, with bonus points for "diamond hands" (participants of the Community Access Sale who claim tokens by March 31, 2024, and do not sell them).
• Lending on Flux Finance.
• Minting and holding Ondo USD Yield (USDY).
• Participating in Flux's governance via Tally.
• Holding OUSG.
• Holding uninvested USDC or USDT tokens onchain throughout 2023.

Other Mechanisms

• No Staking/Liquidity Provision: As of December 23, 2024, there are no formal staking or liquidity provisioning mechanisms for ONDO.
• No Burning/Buyback: A search found no ONDO burn or buyback mechanisms currently featured or planned.

Locking Mechanism and Unlocking Schedule

The ONDO token was subject to a "Global Lock-Up" until February 2024, preventing all transfers. The lock-up was released on January 18, 2024, marking the "Public Launch" of the token.

The token contract includes a mechanism to control transfers: a transferAllowed variable, which, if set to false, prevents transactions. An enableTransfer function sets this variable to True. A TRANSFER_ROLE exists that can bypass the transferAllowed variable if it is set to false. This role is managed by the address assigned the DEFAULT_ADMIN_ROLE.

Tokens sold during the Seed Round are subject to a one-year cliff following the public launch on January 18, 2024, followed by three years of yearly vesting.

Future Unlock Events

The following table details the known future unlock events for Ondo Finance, starting from the date of this report:

These unlocks represent significant future increases in the circulating supply, with the first three events each potentially increasing the circulating supply by over 61%.