Is RWA going to be the next financial giant? All signs are heading in that direction. BlackRock launched its Buidl Fund back in March this year. The BlackRock USD Institutional Digital Liquidity Fund. In case you didn’t know, BlackRock is one of the world’s biggest financial investment firms. Buidl offers tokenized U.S. Treasuries. I’ve mentioned it before, but here we go one more time. The Boston Consulting Group projects a $16 trillion market by 2030 for RWAs. In 2030, that should be 10% of the global GDP.
We asked you in our AB Community Discord what you wanted to see in a comparison video. Did you know we have a free Discord for our community? Come check it out. And this was our winner. Today, I compare the two top RWA protocols measured by market caps. Here’s Ondo Finance vs Mantra Chain.
What Is RWA?
RWA is about tokenizing Real World assets. You can tokenize anything. For example, real estate, art, commodities, or other financial instruments. You can fractionalize RWAs as well. For instance, real estate. You may not be able to own a whole house. However, with a fractionalized house, you can own part(s) of it.
Now, both projects, Ondo Finance and Mantra Chain, target institutions. However, that doesn’t mean that you can’t buy their respective tokens. In contrast, you can buy them on every exchange that lists them. Most major exchanges have both the $ONDO and the $OM token listed.
What is Ondo Finance ($ONDO)?
Ondo Finance ($ONDO) is the leader of the RWA pack, if measured by market cap. Considering that Ondo only launched in January this year, that’s a great feat. Ondo’s main target is institutions. However, individuals can also trade on their platform.
Before you can start trading on Ondo, you need to complete a KYC. Firms need to complete a KYB. Both set-ups confirm your ID or the business structure and activities. Platforms carry them out under internal policies and legal requirements. To clarify, this is a different KYC compared to a CEX. Anyone who wants to buy the $ONDO token can. This is for listing or trading assets on Ondo. However, keep in mind that Ondo Finance is not available for US residents or entities.
Ondo offers two different tokens for trading on their platform. They are both tokenized notes.
- $USDY — backed by short-term US Treasuries and bank demand deposits with a 5.35% APY.
- $OUSG — backed by US Treasuries but only available for qualified purchasers. These offer a 5.08% APY.
Source: Ondo Finance
You can onboard on their $USDY webpage. After onboarding, you can mint or redeem $USDY only on business days. So, there you go, Ondo is not a 24/7 crypto exchange.
I already mentioned BlackRock’s Buidl Fund. Well, Ondo moved assets worth $95 million to this fund. However, there was a recent unexpected turn of events. Ondo surpassed BlackRock in TVL for RWAs.
The current $ONDO price is 68 cents, which is a steal. Its market cap is $975 million. There’s a max and total supply of 10 billion $OND. However, it’s a fairly new project. Hence, there are only 1.4 billion tokens, or 14% in circulation. For the next 5 years, there are big yearly token unlocks on 18th January.
What Is Mantra Chain ($OM)
Mantra Chain ($OM) is second on that list of RWA protocols measured by market cap. It has been around since June 2020. As a result, it unlocked almost all its tokens by now. Out of a 888,888,888 million max and total supply, 843 million, already circulate. In other words, no more unlocks are coming your way. $OM’s current price is 91 cents, and it has a market cap of $764 million. It’s up 4,600% over the last year.
I did a deep dive video about Mantra about a month ago. Now, Mantra is a permissionless chain for permissioned dApps. Being permissionless means that anyone can use the chain. There’s no single entity controlling the chain, and users can stay anonymous. The permissioned part is that Mantra is regulatory compliant.
So, like Ondo, before you can trade on Mantra, you need to complete a KYC or KYB. However, this ends the anonymous part. So, Mantra offers compliant trading, and it has licenses to prove this. Think of real estate or equities. For example, with SOMA (a System Open Market Account) in the US. The Federal Reserve runs this. These are dollar-denominated securities. Mantra is looking to secure more licenses around the world.
Mantra Chain has four main features.
1. Mantra Compliance Module
These are tools and services that allow you to meet regulatory requirements. For example, a reusable KYC/KYB. This is an on-chain decentralized ID (DID) that works with soul-bound NFTs.
Source: Mantra Chain docs
2. Mantra Token Service (MTS)
Here you can create your own compliant digital assets on Mantra. It’s a Software Development Kit or SDK.
3. Mantra Asset Module
This makes sure that the MTS works. It lets you give a name and a symbol to your tokens.
4. Mantra DEX
Currently, two features are live, with more in the pipeline.
- An option to stake your $OM tokens.
- It offers vaults that allow you to earn yield on your $USDC.
Which Do You Prefer?
So, we saw two top-notch RWA protocols. However, they offer slightly different products. Nonetheless, they both target institutions.
Ondo offers trading in two different tokens on their platform, $USDY and $OUSG. They’re both backed by US Treasuries.
On the other hand, Mantra lets you tokenize a wide variety of RWAs. For example, art, commodities, or real estate. You can trade them on their own DEX.
To make it more interesting, both protocols also work together. Mantra will launch an RWA savings vault powered by Ondo’s $USDY later this year. So, tell me, which of these two protocols do you like best and why?
🔥 MANTRA Launches RWA Savings Vault Powered by Ondo’s USDY#Ondo and #MANTRA will incentivize a multi-chain USDY vault allowing contributors of USDC to gain access to low-risk, short-term US treasuries yield. Those holding until the MANTRA Chain mainnet launch will receive… pic.twitter.com/X8ALXIFoGj
— MANTRA – Tokenizing RWAs 🕉️ (@MANTRA_Chain) May 31, 2024
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