Concerns Over Ondo Finance
Quinn Thompson, the mastermind behind Lekker Capital, has once more drawn concern towards Ondo Finance, following the fallout from the Mantra scandal. On April 14, Thompson addressed his followers on social media platform X, urging caution regarding Ondo Finance (ONDO) and referencing the recent issues surrounding the Mantra $OM token scandal. He emphasized the importance of sharing his previous observations about Ondo, hoping to prevent potential financial disasters for others.
Suspicion of Overstated Total Value Locked
In this post, Thompson revisited a discussion he had initiated on March 18, in which he solicited the expertise of on-chain analysts to examine whether the Total Value Locked (TVL) for Ondo Finance is overstated, suggesting it could be due to the team selling their own tokens. These funds, he theorized, are being reinvested into the protocol, creating a façade of genuine user growth.
He specifically questioned whether the bulk of Ondo’s TVL is derived from these internal transactions, implying that the growth figures might be manipulated. Reiterating points raised in a prior critique from October 2024, Thompson highlighted that Ondo boasts a staggering $7 billion fully diluted valuation without generating any revenue.
Concerns Regarding Revenue Model
Compounding his concerns, he pointed out the protocol’s products, USDY and OUSG, which he described as mere repackaged offerings based on Blackrock’s investments. Thompson noted that Ondo’s revenue model is weak, as its nominal fee of 0.15% had been suspended until 2025, translating to zero earnings despite a seemingly substantial TVL.
He speculated that when fees do come into effect, users may choose to withdraw their funds for safer, cost-effective options like BUIDL, which might offer better returns.
Implications of Charges and Revenue Multiples
To illustrate the gravity of the situation, he claimed that should Ondo begin charging fees, their expected annual revenue would be around $975,000, resulting in an eye-watering 7,000 times revenue multiple on a business operating on the edge. Amidst Thompson’s alarming assertions, one user chimed in with a comment suggesting that these controversies were already widely recognized, sharing a screenshot from a Telegram discussion that delineated the alleged strategies behind Ondo’s inflated TVL.
Possibility of Misleading Total Value
This scenario unveils the possibility that, although genuine assets are tied up in Ondo Finance, the reported TVL is misleading. A significant portion of the capital appears to be invested in tokenized U.S. Treasury Bills, known for their low-risk profile and traditional finance characteristics, rather than being actively employed in decentralized finance (DeFi) activities such as lending or trading.
Therefore, it could be concluded that Ondo Finance might be employing tactics to artificially bolster its TVL figures, thus presenting a skewed image of its actual user adoption and market presence.
