Can Ondo (ONDO) make money from bonds?

The team behind Ondo (ONDO) is betting people will buy exchange-traded funds and government bonds through the blockchain.

Ondo Finance is a decentralized finance (DeFi) protocol that lets users invest in synthetic assets in funds that invest in exchange-traded funds (EFTs) that in corporate and government bonds. They claim Ondo will invest in funds controlled by two of the world’s largest bond managers, BlackRock (BLK) and PIMCO.

Another claim is third-party custodians will hold all of Ondo’s funds. Meanwhile, the NAV Consulting firm will audit Ondo’s funds each day. Finally, Ondo claims to have a management team of financial industry professionals with experience at Goldman Sachs (GS) and Bridgewater on some resumes.

Another Ondo service is the decentralized Flux Protocol, which allows users to lend and Borrow Onchain. Permissioned tokens (Ondo’s synthetic assets) secure the Flux loans.

Ondo Permissioned Tokens

Permissioned tokens are cryptocurrencies that contain a built-in control mechanism (a smart contract). To explain, the control mechanism sells assets when a token is sold. It also buys assets when you buy a token. For example, it can sell bonds, or EFTs.