Ondo (ONDO) tokenomika

The ONDO token is an ERC-20 token on Ethereum that serves as the governance token for the Ondo DAO and Flux Finance. The token's economics are structured around a fixed supply, a multi-stage allocation, and a detailed vesting schedule for early participants and the core team.

Issuance Mechanism

The ONDO token has a maximum token supply of 10 billion tokens.

• Fixed Supply: There is no scheduled or planned inflation for the ONDO token, indicating a fixed supply model.
• Creation and Launch: The token was created on April 28, 2022. It was initially subject to a "Global Lock-Up," meaning no tokens could be transferred until the lock-up was released.
• Public Launch: The restrictions on transferring ONDO were lifted on January 18, 2024, following a decisive vote by the Ondo DAO on a proposal from the Ondo Foundation. This event marked the "Public Launch" of the token and established the structured distribution schedule.
• Minting Control: A "mint" function exists in the token contract, which can only be called by an address assigned the "MINTER_ROLE." However, this function is constrained and cannot be called if the total supply exceeds the 10 billion ONDO maximum.

Allocation Mechanism

The total supply of 10 billion ONDO tokens was allocated across several categories, including private sales, a community sale, ecosystem growth, and protocol development.

Usage and Incentive Mechanism

The primary use of the ONDO token is for governance, with additional incentives provided through the Ondo Points Program.

Governance

ONDO tokenholders are entrusted with shaping the future of the Ondo DAO and Flux Finance, a decentralized lending protocol governed by the DAO.

• Voting Rights: Tokenholders can submit and vote on onchain governance proposals via Tally.
• Proposal Scope: Proposals can include changes to Flux Finance, such as:
  • Listing new fTokens (adding support for lendable and borrowable assets).
  • Pausing fToken markets.
  • Updating interest rate models.
  • Choosing a new admin.
  • Managing the Ondo DAO treasury assets.
  • Controlling ONDO emissions for ecosystem growth.
• Proposal Requirements:
  • To submit a proposal, a user must have at least 100 million ONDO delegated to them.
  • For a proposal to pass, at least 1 million ONDO must be used to vote, and the quorum must be met.
  • Once passed, a one-day timelock begins before the proposal is executed onchain.
• Locked Tokens: Tokens subject to lock-ups can still be used to vote in the DAO.

Incentives (Ondo Points Program)

The Ondo Foundation's Ondo Points Program is used to incentivize participation and holding.

• Earning Points: Points can be earned by:
  • 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 (voting or becoming an active delegate).
• Future Rewards: The foundation has stated that "in the coming months, we’ll announce further rewards for those who earn points," but the specific utility of the points has not yet been disclosed.

Locking Mechanism and Unlocking Schedule

The ONDO token was subject to a "Global Lock-Up" until January 18, 2024. Following the public launch, tokens allocated to investors and the core team are subject to specific vesting schedules.

Locking Mechanisms

• Initial Lock-Up: All ONDO tokens were non-transferable until the "Global Lock-Up" was lifted on January 18, 2024.
• Core Team Lock-Up: Ondo core team members are subject to a 5-year lock-up period.
• Transfer Control: The ONDO token contract includes a "transferAllowed" variable that can prevent token transfers if set to "false." An "enableTransfer" function exists to set it to "True." A "TRANSFER_ROLE" can bypass this restriction, and this role can be granted or revoked by the address assigned the "DEFAULT_ADMIN_ROLE."

Investor Vesting and Unlocking Time

Investor allocations are subject to a one-year cliff followed by a vesting period, starting from the public launch date of January 18, 2024.

Major Future Unlock Events

The following table details the largest scheduled unlock events for Ondo Finance, showing the significant impact on the circulating supply in the coming years.

Note: Smaller daily unlocks of 54,340 ONDO are also scheduled throughout late 2024 and early 2025, with a negligible impact (0%) on the circulating supply.