Author: Curie, Deep Tide TechFlow

When the market is bad, looking at who is still rising may be an indicator of which projects will still make a move.

Bitcoin has been lingering around $63,000 for almost a month, while most altcoins are lying flat and going unnoticed. The crypto market has basically been in one state during the first half of this year, with money and attention seeking the next outlet after the meme craze subsided.

The memes on Robinhood are part of it, but there is currently a trend of retreating; RWA is another high-confidence battlefield.

For example, the ONDO token was around $0.31 at the beginning of July and is now nearing $0.40, having risen nearly 30% in three weeks. This could certainly be the result of market manipulation or market cap management. But what is more interesting is that ONDO's increase is occurring in a larger context.

On Hyperliquid, in the third week of July, the trading volume of tokenized stocks and commodities reached $25.1 billion, reportedly surpassing the trading volume of crypto assets on the platform for the first time.

Trade[XYZ] has launched on-chain contracts for SpaceX and the latest ChangXin Storage, with tokenized stocks now accounting for 23 of the top 30 assets on Hyperliquid. Binance is also following suit, capturing 56% of the CEX market for RWA perpetual contracts. Even the SEC is discussing granting a "innovation exemption" for tokenized stock trading.

In other words, trading US stocks on-chain is clearly the main storyline of this version of crypto. And ONDO happens to be the one making the most moves on this recent main line.

The US stock contracts on Hyperliquid are mostly from Ondo.

ONDO's 30% rise, if viewed solely as "another RWA concept token is rising," is a loss. Ondo's position at this table is different from that of Hyperliquid and Binance.

Hyperliquid and Binance are fighting for trading volume.

Trade[XYZ] has achieved 79% in open interest in the RWA perpetual race, while Binance's total RWA perpetual trading volume for Q1 has reached $450 billion.

To put it in an inappropriate analogy, they are the ones running restaurants, while Ondo is the supplier of ingredients.

Those tokenized stock contracts launched on trade[XYZ] have a significant portion of their underlying assets from Ondo Global Markets. According to AInvest, the on-chain tokenized stocks accessed by Hyperliquid through Felix Protocol in May this year are also Ondo-issued tokens.

According to data from RWA.xyz, Ondo Global Markets holds over 70% of the issuance side for tokenized stocks, with a TVL exceeding $5 billion and a cumulative trading volume exceeding $18 billion.

The platform has over 260 tokenized US stocks and ETFs, available on Ethereum, Solana, and BNB Chain, distributed through channels like Binance, Bitget, MetaMask, and Blockchain.com.

When the DTCC news came out on July 15, ONDO rose 18% that day. For an old token, the market's reaction was so strong, and the reason lies here.

DTCC is the clearing and settlement hub for US stock trading, and nearly all US stock transactions ultimately pass through it. The on-chain US stock certificates issued by Ondo through DTCC tokenization services appear on the same participant list as BlackRock, J.P. Morgan, Goldman Sachs, and Nasdaq.

This is not a "cooperation announcement" level message; this is a distribution channel level message.

When Ondo transitions from supplier to retailer, Perps data analysis

After capturing 70% of the upstream market, Ondo began to move downstream.

The Ondo Perps launched on July 7 is equivalent to Ondo itself opening a trading platform, offering perpetual contracts for US stocks, ETFs, and commodities, with up to 20x leverage.

This platform has a feature that others currently cannot provide: using tokenized stocks issued by Ondo directly as collateral. If you hold an on-chain Apple or Nvidia token, you can use it to open a position directly.

On Hyperliquid or other perp platforms, you must first convert your assets into USDC or USDT to use as collateral, because the trading platform and asset issuer are two separate parties. Ondo consolidates issuance and trading, eliminating that friction in between.

According to DefiLlama's RWA Perps ranking, as of July 28, the 24-hour trading volume for Ondo Perps was $221 million, ranking fourth.

The growth rate is indeed fast, but the open interest is only $49.92 million, accounting for 1.15% of the entire market. The trading volume divided by open interest is 4.4 times, which indicates that the money comes in, turns around, and leaves on the same day, resulting in thin overnight positions.

For comparison, the same indicator for trade[XYZ] is 1.6 times, indicating significantly thicker capital retention.

The $221 million daily trading figure is certainly a fraction compared to Hyperliquid's $25.1 billion weekly trading volume. But Ondo Perps is not targeting the same batch of users.

What it does is convert holders from its $5 billion asset pool into traders, earning from both issuance fees and trading fees. The logic of this play may not lie in whether the daily trading volume can catch up with Hyperliquid, but rather whether the open interest can rise above $50 million, which is more critical. Trading volume can be driven by market making and incentives, but overnight positions cannot be forced.

It is worth noting that DefiLlama's overall RWA Perps leaderboard and the Ondo Perps protocol page provide two different figures, differing by nearly three times (the protocol page shows a 24-hour trading volume of $77.53 million and open interest of $10.3 million). Just keep people locked into a single standard for vertical comparison, as cross-standard horizontal comparisons can lead to errors.

Was the promised Ondo public chain discarded?

On July 27, Ondo announced Ondo Network, replacing its previous Ondo Chain public chain plan that had been promoted for over a year.

In simple terms, Ondo is now breaking trading into two segments. Execution (matching, margin, clearing) runs in a hardware enclave, which is a closed space separated from chip internals that even server administrators cannot see inside, with speeds approaching centralized exchanges. Settlement (who owns what) still runs on Ethereum. Ondo Perps operates on this architecture.

Choosing not to build its own chain seems more pragmatic to me than forcing a Layer 1.

In the past two years, the lessons from the Layer 1 track have been abundant; building a chain means accumulating liquidity and ecosystem from scratch, while Ondo's assets are already deployed across multiple chains like Ethereum and Solana. Separating the execution layer allows for a lighter battle approach, reducing risks significantly.

However, the current architecture has two compromises that Ondo itself also acknowledges.

First, the execution runs in a single enclave, not a distributed network; transaction verification is entrusted to a group of independent operators called "witnesses," but the number, list, and identities are not made public, creating a bit of a centralization issue.

Second, the security of the enclave plan is anchored on the chip manufacturer, and Ondo has not disclosed which generation of chip hardware they are using, raising questions about chip security.

These technical details do not constitute buy or sell signals, but they imply that Ondo Network is currently closer to a "verifiable centralized execution layer," and still far from the decentralized endgame described in the white paper.

However, for those wanting to focus on the ONDO token, what needs more attention is that the CEO stated that the ONDO token will play an incentive and governance role in the future network's decentralization, but the economic model for witnesses and profit-sharing methods are all written under "possible directions," with none having a timeline.

What is currently driving ONDO's price increase?

Breaking it down, the 18% increase comes from the DTCC news, which is pricing Ondo's distribution channel upgrade, specifically pricing the identity of being "on the same list as BlackRock and Goldman."

About another 10% comes from the SBI Group partnership (Japan market entry) and the overall rise of the RWA sector's beta.

The structural upgrade information released on July 27, with the decision to not do Layer 1 but instead focus on the trading layer, has very limited impact on token price changes.

Therefore, this signal of speculation is quite clear: catalysts come mainly from RWA issuance's 70% share and institutional distribution channels, rather than from the technical architecture.

From an investment perspective, the current price of ONDO is $0.38, with a market cap of approximately $2 billion, down about 65% from the 52-week high of $1.13.

If you believe that on-chain US stock trading will become a structural trend lasting for several years (the data from that week on Hyperliquid at least indicates a trend exists), then Ondo, holding 70% of the issuance side, indeed has a fundamental logical support.

Ondo is indeed doing significant things, and tokenized stocks are certainly the offspring of the version, but constrained by the overall downturn in the crypto market, short-term catalysts are hard to create long-term structural increases, more often reflecting short-term reactions to events and capital games.