Ondo Finance reveals that he has secured $ 4 million in capital to bring “programmable” DeFi returns to investors with “a wide range” of risk preferences.
The round table would have been led by Capital of Pantera as well as contributions from Genesis, Digital Currency Group, CMS, CoinFund, Chapter One, Bixin, Divergence, Protoscale Capital and The LAO.
Several angel investors also participated in Ondo Finance’s investment round, including Stani Kulechov (Founder Aave), Josh Hannah (Founder Betfair), Richard Ma (Founder Quantstamp) and Christy Choi (Former Head of Investments at Binance).
Ondo is an âunlicensedâ protocol developed to support decentralized finance or DeFi adoption among traditional investors by âenabling granular exchange of riskâ.
As mentioned in a statement shared with CI:
âIn an economic environment of record interest rates, Ondo Finance is well positioned to open the door to wider adoption of DeFi by allowing risk averse investors to capture DeFi returns with mitigated and transparent risk, while simultaneously releasing higher upside exposures for DeFi-native investors. “
The return that exists in digital asset markets comes in âthe form of volatile ratesâ which are derived from a âcomplexâ source of inputs. This represents a significant barrier to entry for retail and institutional investors who “seek a return with a defined risk”. So far, those wishing to adopt DeFi are “higher on the risk appetite scale,” the update notes.
They are exposed to volatile returns, “impermanent losses” from decentralized non-custodial exchanges such as Uniswap, and “mixed risk” from lending protocols such as Compound. APYs, often “exorbitant”, are “inaccessible to traditional market players who expect more stable returns with understandable and customizable risk,” notes the announcement.
As stated in the press release:
âOndo is a new DeFi primitive that allows users to create risk-insulated fixed return loans backed by return-generating cryptoassets. Lenders and borrowers together contribute capital in Ondo Vaults, which use smart contracts to enforce loan provisions, for example by controlling the use of borrowed capital.
Each Ondo vault is “unique” and Ondo vaults do not “mix up risks,” the announcement explained while adding that there are two main types of positions in Ondo’s initial vaults: Fixed return, which “seeks to offer a stable return with a mitigated downside risk”, and Variable yield, which âseeks to maximize returns using leverageâ.
Ondo users can invest in both positions “in any ratio of their choice, creating their own personalized return profiles,” the update notes.
By allowing users to ‘define their risk exposure’, Ondo enables’ risk averse ‘investors’ to capture DeFi return with mitigated and transparent risk while simultaneously unlocking higher upside exposures for native investors of Challenge “.
Ondo was founded by former Goldman Sachs traders and technologists who “identified a single market opportunity to create a suite of products that would allow institutions to gain risk-controlled DeFi exposure.”
Nathan Allman, CEO of Ondo Finance, said:
âWe have just scratched the surface of opportunities in DeFi with services such as basic lending, trading and derivatives. We see a huge opportunity to bring a wider range of traditional finance products to DeFi and create new financial primitives. Ondo Vaults is our first foray into this area. We are grateful for the support of our investors who recognize the immense potential of DeFi to democratize access to a wide range of financial services previously only available to institutions. “
Paul Veradittakit, partner at Pantera Capital, noted:
âFixed income remains the missing piece that decentralized finance needs to become mainstream. Ondo unlocks downside protection and relative certainty in forecasting returns for institutional investors looking to allocate to the attractive returns of the DeFi space. We are delighted to support the Ondo team in their mission to bridge the worlds of DeFi and institutional finance. “
Ondo introduced its first safes last month with a cap on invested assets “as a security measure”. Prior to its launch, Ondo had performed security audits conducted by Quantstamp, Peckshield and Certik.
On August 17, Ondo introduced 4 additional safes with “a cap of $ 10 million on invested assets, including chests offering 10% fixed APY on USD stablecoins and 50% fixed APY on ETH “.
For more details on these updates, click here.