Ondo Finance to Unlock $2.4B Worth of ONDO Tokens, a Bearish Signal That Has Previously Boosted the Token's Price

Ondo Finance, a platform known for tokenizing real-world assets, is set to witness a massive influx of its governance token into the market.

Over 1.9 billion previously restricted ONDO tokens, valued at around $2.4 billion, are slated to be released at 7:00 p.m. EST on Friday, as per the vesting analytics platform Tokenomist. In comparison, Ondo's current circulating supply stands at less than 1.4 billion.

This upcoming release not only surpasses ONDO's current market capitalization of $1.8 billion but also vastly exceeds the token's 24-hour trading volume of $222.6 million, according to market data from CoinGecko.

Out of the total unlocking, around 792 million ONDO tokens (40%) are dedicated to ecosystem growth, while 825 million tokens (42%) are earmarked for protocol development, as per Tokenomist. The remaining tokens are allocated to private sales.

In 2022, Ondo announced that it raised $20 million in a Series A investment round led by Founders Fund and Pantera Capital, with Coinbase Ventures, Wintermute, and GoldenTree joining as strategic investors in the round.

Similar to vesting schedules for stocks in traditional finance, token unlocks are a common mechanism that aims to restrict founding team members or investors from selling tokens en masse during the early stages of the protocol.

The last time ONDO conducted its previous token unlock was in January 2024, when 1.4 billion ONDO was allocated to ecosystem growth and a community access sale.

Usually, token unlocks are considered a bearish signal as they increase the supply of the given cryptocurrency. However, since Ondo's unlock last year, the price of ONDO has surged by over 475% to trade at $1.25.

This price increase coincides with the growth of the protocol's total value locked (TVL), which increased by almost 184%, from $192 million to $545.7 million, according to DefiLlama.

ONDO is the platform's governance token, which began trading a year ago when the DAO approved the removal of restrictions on transferring ONDO. Holders of ONDO can vote on various proposals to change the protocol's smart contracts and economic parameters, among other things, as mentioned in Ondo DAO's documentation.

Representatives of Ondo Finance did not immediately respond to Unchained's request for comments.