Goldman Sachs Crypto Alums Raise $4M for DeFi Protocol Ondo Finance
Ondo Finance announced today it has raised $4M to bring programmable DeFi returns to investors with a wide array of risk preferences. The equity round was led by Pantera Capital with participation from Genesis, Digital Currency Group, CMS, CoinFund, Chapter One, Bixin, Divergence, Protoscale Capital, and The LAO, alongside angel investors such as Stani Kulechov (founder Aave), Josh Hannah (founder Betfair), Richard Ma (founder Quantstamp), Diogo Monica (co-founder Anchorage), and Christy Choi (former Head of Investments at Binance).
Ondo is a permissionless protocol built to accelerate DeFi adoption among mainstream investors by enabling the granular exchange of risk. In an economic environment of record-low interest rates, Ondo Finance is positioned to open the door to broader DeFi adoption by allowing risk-averse investors to capture DeFi yield with mitigated and transparent risk, while simultaneously unlocking higher upside exposures for DeFi-native investors.
Existing yield in crypto-asset markets is in the form of volatile rates derived from a complex source of inputs. This is a barrier to entry both for retail and institutional market participants who seek yield with defined risk. Thus far, those willing to adopt DeFi are higher on the risk appetite scale. They are exposed to volatile yields, impermanent loss from decentralized exchanges like Uniswap, and commingled risk from lending protocols like Compound. The often sky-high APYs are inaccessible to traditional market participants who expect more stable returns with comprehensible and customizable risk.
Ondo is a new DeFi primitive that lets users originate risk-isolated, fixed yield loans backed by yield-generating crypto-assets. Lenders and borrowers contribute capital together in Ondo Vaults, which use smart contracts to enforce loan provisions, such as by controlling the use of borrowed capital. Every Ondo Vault is unique and Ondo Vaults do not commingle risks. There are two types of positions in Ondo’s initial Vaults: Fixed Yield, which seeks to deliver a stable yield with mitigated downside risk, and Variable Yield, which seeks to maximize returns by using leverage. Ondo users can invest in both positions in any ratio they choose, creating their own customized return profiles. By enabling users to define their risk exposure, Ondo allows risk-averse investors to capture DeFi yield with mitigated and transparent risk while simultaneously unlocking higher upside exposures for DeFi-native investors.
Ondo was founded by former Goldman Sachs traders and technologists who identified a unique market opportunity to build a suite of products that would let institutions obtain risk-controlled exposure to DeFi. Nathan Allman, CEO of Ondo Finance, said, “We have just scratched the surface of opportunity in DeFi with services like lending, trading, and basic derivatives. We see a huge opportunity to bring a wider array of products from traditional finance to DeFi and create new financial primitives. Ondo Vaults are our first foray into this. We are grateful for the support of our investors who recognize the immense potential for DeFi to democratize access to a wide range of financial services previously only accessible to institutions.”
Paul Veradittakit, Partner at Pantera Capital, noted, “Fixed income remains the missing piece that decentralized finance needs to go mainstream. Ondo unlocks downside protection and relative certainty in forecasting returns for institutional investors looking to allocate to the attractive yields in the DeFi space. We are excited to back the Ondo team in their mission to bridge the worlds of DeFi and institutional finance.”
Ondo launched its first Vaults in late July with a cap on invested assets as a security precaution. Prior to launch, Ondo completed security audits from Quantstamp, Peckshield, and Certik. Today, Ondo has launched four more Vaults with an increased $10m cap on invested assets, including Vaults offering 10% fixed APY on USD stablecoins and 50% fixed APY on ETH.
For more information, please visit Ondo.Finance.
About Ondo Finance
Ondo Finance makes decentralized finance available to anyone, providing users with choice between downside protection and higher returns. Ondo introduces pooled liquidity with multiple investment classes, making DeFi yields accessible to investors with a wide array of risk preferences. Ondo Finance was founded by Nathan Allman and Pinku Surana, both formerly of Goldman Sachs. The team includes alumni from Facebook, Microsoft, Symbiont, BadgerDAO, private equity funds, hedge funds, and various venture-backed start-ups.