Timing the ONDO Unlock

We’ve been getting a lot of questions recently about the future of the ONDO token– particularly about when it might start trading– so we wanted to provide you with an update.

ONDO Purpose

As a reminder, ONDO tokens govern the Ondo DAO, which was launched on January 12, 2023. The objective for the Ondo DAO has always been to support and govern institutional-grade on-chain protocols that we believe will provide critical long-term functionality to the financial ecosystem. We believe that the merging of DeFi and TradFi is inevitable, and that protocols that effectively bring the best of these two worlds together are important catalysts for facilitating this process.

A prime example of this is Flux Finance, which the Ondo DAO governs. Flux is a first-of-its-kind lending protocol that supports both permissionless and permissioned assets. Permissioned assets are ones where the holders must be known at all times, which is a requirement for most tokenized securities. The first such asset supported by Flux is Ondo Finance’s OUSG token, which offers exposure to U.S. Treasuries. Flux allows OUSG holders to pledge their OUSG as collateral to borrow stablecoins. Conversely, and more importantly, this also allows anyone to lend into the protocol and get yield close to that on short-term U.S. Treasuries while also being over-collateralized by them.

Even with OUSG alone, Flux is off to a strong start with over $70 million in supplied assets: this makes it the seventh largest lending protocol on Ethereum and the largest in the “real world asset” space. Its tokenized loans, known as fTokens, present a uniquely attractive low risk permissionless on-chain yield, and are in the process of being adopted as collateral elsewhere in DeFi. For instance, the Aave DAO recently passed a temperature check to support fUSDC (i.e. what you get when you lend USDC into Flux) as collateral in Aave v3. Flux is starting to serve as a bridge between on-chain and off-chain yields for the rest of DeFi.

It should be noted that while $70 million is a great start, we believe that the market for Treasury collateralized lending and borrowing can get much bigger. As a point of comparison, the overnight reverse repo market - a traditional financial market where Treasuries are effectively borrowed and lent overnight - sees about $2.28 trillion in transaction volume a day as of our writing this.

The CoinList Sale and ONDO Lock-Ups

In May 2022, the ONDO token was distributed through CoinList to over 18,000 purchasers, with two types of lock-ups implemented:

Individual lock-ups: These lock-ups are specific to the tokens distributed, with the vast majority of tokens sold through CoinList gradually releasing from their respective lock-ups over a six-month period starting from June 1, 2023. This approach ensures a measured release of tokens, supporting long-term commitment and stability.

Global lock-up: All ONDO tokens, irrespective of distribution, are subject to the global lock-up. The release of the global lock-up requires a majority vote by ONDO token holders through a valid proposal, following Ondo DAO procedures.

In order to be transferable, ONDO tokens must be free from both their individual lock-up and the global lock-up.

Please note that the foregoing is a summary of the lock-ups applicable to ONDO tokens, and is qualified in all respects by, and in no way modifies, any agreements to which you are party regarding the issuance, purchase, grant, distribution or delivery of ONDO tokens to you. Please refer to those agreements to understand the restrictions applicable to your ONDO tokens.

Purpose of the Global Lock-Up

The global lock-up serves as a crucial mechanism to safeguard the interests of all ONDO token holders. Its primary objective is to foster stability, encourage long-term commitment, and discourage speculative trading. This measure reflects our dedication to creating a sustainable ecosystem that withstands market volatility and delivers lasting value.

Token unlocks represent a powerful opportunity for a project to garner public attention, and to open the door to new participants in the Ondo DAO community. A token unlock is also an event that should be timed thoughtfully given the impact of these benefits is arguably most pronounced in the period around the unlock itself, and given these benefits come with obvious tradeoffs. The global lock-up gives the Ondo DAO community the ability to collectively decide on when the right time is for a token unlock for the community as a whole, rather than presupposing that date far in advance.

Considerations for Token Unlock Timing

Given the above, the obvious question is when and how to best unlock the ONDO tokens to best achieve the community’s objectives. We believe there are several considerations that make now a less-than-ideal time to release the global lock-up.

The first is general macro conditions. It is no secret that the current macro conditions are highly challenging for all crypto projects. To ensure the most favorable outcome, we believe it is in the community’s best interest to wait for improved general macro conditions.

The second is the breadth and maturity of the DAO-governed product suite. We believe significantly more can be done to both bolster the utilization of the existing Flux protocol as well as expand the set of protocols governed by the DAO and that much of the last year has been laying the groundwork for more rapid growth over the next. We think it is prudent to time the global lock-up release when the Ondo DAO’s product suite is more mature, enabling the community to better engage with increased attention.

The third is the strategic dynamics around token unlocks in general. Token unlocks represent an opportunity to more easily allow for new DAO members and for the DAO to potentially take advantage of token rewards. We think these are better utilized in improved market conditions and for a more mature product suite.

For these reasons, we believe that it is in the community’s interest to wait to release the global lock-up. Of course, this should be part of an ongoing evaluation that can and should be revisited on a regular basis.

Community Engagement and Input

These are our views, but we value the opinions and perspectives of the broader ONDO community and encourage your active participation in the decision-making process.

To facilitate open discussion, we invite you to join us on Monday, May 29 at 10 am ET in the Ondo DAO Discord. Your input is crucial in shaping the future of the project and ensuring that decisions align with the community’s interests.

Thank You

Finally, we want to extend our heartfelt appreciation for your continued support and patience. We are thrilled to see nearly 10,000 ONDO holders who have claimed their tokens, making it one of the largest DAOs on Ethereum. Despite its young age, only seven DAOs on Ethereum have more holders on Tally including Aave, Compound, Uniswap, Gitcoin, and ENS.

We are committed to making informed decisions that maximize the potential of ONDO and create a thriving community of token holders. Together, we will navigate the market landscape and lay the foundation for the future of DeFi.

Thank you for being an integral part of the ONDO community.

– Flux Finance Inc.

10 Likes

I believe that the postponement of the release date is a negative towards the community and there are reasons for this.

  1. We have been waiting long enough to receive our tokens
  2. At any moment, a situation may arise when the SEC begins to deal with projects, ONDO will be recognized as a security, like other cryptocurrencies, with the exception of BTC and ETH, in which case we will get 0 instead of profit
    The unlocks are not so big that it affects the project

I know a lot of projects that have been waiting for a better moment, but ended sadly. If they had come out right away, they would have come out much better
A recession, default may be waiting for us ahead, the cryptocurrency market will have a very, very hard time in this case

There will never be a right moment if not now

13 Likes

I think it’s time to remove the global token lock. Now that Flux is up and running, it’s time for new ONDO holders to come in so that there can be a better democracy and everyone can become marketing with the token. ONDO holders want a vote to unlock the token and let the DAO decide.

14 Likes

As you see, that just your team concerns, not retailer investors like us concern. We need to unlock and move token to a new wallet for safe reason. And it seem not a Dao to vote because the dev team already make the decision of this instead of vote.

10 Likes

How do we know when the market conditions improve in order to release tokens? We participated in your project based on the agreement between us when the sale begins on coinlist. It starts selling and unlocking the tokend on June 1, 2023. We been waiting a year for this to happen. We want our money. We have nothing to do with the market and its circumstances. that was our agreement.

10 Likes

Let’s stay whit we agree when purchased the tokens the conditions where explicit and we should stick to that

4 Likes

I’m much more interested at staking my ONDO

2 Likes

The reasons given for delaying the unlock are valid in my opinion however they are not sufficient to outweigh the following:

  1. The clear expectation from all who bought during the coinlist sale that their tokens would be available and free to transfer - even if not necessarily exchange tradable - from the 1.Jun.23 date
  2. The opportunity to raise the profile and increase investor interest with some kind of staking options
  3. The complete lack of engagement with the community from the project team. What would we be waiting for, what is the roadmap, how do you plan to tap this huge TradFi market, wen news?!!
  4. Am I right that Coinbase is an investor? Surely this should help with a listing there which would be great news?

The concept is awesome and v1 I thought was really well executed but I’m not convinced right now that having my tokens remain locked is going to leave me with a warm, fuzzy feeing.

2 Likes

This is a lack of seriousness. There were promises for this project that are not being met. Releasing the global lock right now would be the right decision. The market is experiencing some growing. I am very dissapointed.

8 Likes

The whole community wants the unlock with very rare exceptions. Just look at the comments here and the Discord. I want the unlock too. Talking about market conditions should not be done for various reasons. No project which delayed listings or unlocks in order to wait for specific market conditions has ever done well (point 1 and 3 talk about “market conditions”). This whole discussion not to unlock, because of market conditions is created created fud and should have never happened. This is a strong project and it will do well and if it doesn’t then the market does it’s thing and will reward more products and features etc and you are always free to HODL, nobody forces you to sell when it is unlocked. There is no reason to fear the market, the market just does it’s thing.

I mean you cannot say it’s good for you to not get the right to do whatever you want with your tokens, we know what is best for you. Everybody should decide on their own what’s good for them. The community wants the unlock there is clear evidence for that in the Forum here and in Discord.

In my opinion it is also not ethical to lock retail investor tokens for more then one year even though the contract theoretically says that this was possible. Nobody ever expected that the team will come out and say lets wait for better market conditions (ie. prices).

If the team and early investors force the lock upon the community, then the early investors tokens and the team tokens cliff/vesting should be pushed further down the line at least the time that the unlock gets extended to keep incentives in check. It cannot be that the team and early investors then say keep it locked until all of our tokens vested and then unlock.

It is not nice that maybe not even a proposal will be created and if it will be created that then team and early investors can easily vote against the whole community. That is not good for the project, community and investors.

Please just unlock.

Thanks.

9 Likes

Let’s vote. Let the community decide and everything will be fair.

5 Likes

We want to release the global lock when it expires, not extend it.

5 Likes

it’s disappointing :thinking:

3 Likes

Let’s remove Global Lock-Up

4 Likes

I like many others disagree, I know conditions haven’t been the best but we’ve waited a year already and timing the market rarely does work out well anyways. Either cycles repeat as normal and we can expect a rally post-halving next year or maybe we get a long recession and things end up different to the past, the future is uncertain and so I think we should just release the token in to the wild, at least that way we can maybe stake or do something with it.

1 Like

Tell me that if the market will be in about the same state for another year you will justify the delay in unlocking the token with the same arguments?

6 Likes

Does it require the token to remain locked or unlocked if the project is affected or not affected by all these factors? If it will be affected positively or negatively by these factors, will it not be affected anyway?

We voted for unlock, when its gonna happen??? The situation that you described could lasting forever: wars, epidemic, world unstability, etc… we will not wait so long.

5 Likes

What does it exactly mean, staking? You are not owner of your tokens now and not getting any reward. You can only SEE it claimed, just digits, No?

Words are important. You used 12 times the word “community” in your message. Well, the community has spoken very clearly: remove the global lock.

5 Likes