The real world assets sector run by Ondo Finance has been performing best for a month

Even though memecoins have taken over cryptocurrencies, protocols focusing on real assets and tokenization, such as Ondo Finance, have seen the greatest growth in fully diluted market capitalization, according to Artemis data.

While memecoins are a large part of cryptocurrency users’ consciousness, real-world assets have been the best-performing sector in the cryptocurrency ecosystem for a month now.

According to data from analyst firm Artemis, the fully diluted market capitalization of the real-world asset sector, consisting of the governance tokens of three projects – Ondo Finance, Clearpool and Maple Finance – increased by 53.5% since May 1 ahead of the following results: sectors: memecoin, finance decentralized and oracles.

“Overall, investors are bullish on RWA following the approval of the ETH ETF, thinking about what it will unlock,” wrote co-founder of cryptocurrency investment firm Modular Capital, Vincent Jow, in a direct message to Unchained on X.

However, because Artemis’ chart is weighted by fully diluted market capitalization, RWA’s month-to-date performance is “heavily skewed by one factor,” namely Ondo Finance’s ONDO governance token.

The three projects in the Artemis RWA sector have a combined fully diluted valuation (FDV) of $12.2 billion, with Ondo Finance accounting for 97% of the sector with an FDV of almost $11.9 billion. Clearpool’s FDV is worth almost $187 million and Maple’s FDV is about $147 million.

In May, ONDO’s value increased by over 54% and reached a price of $1.20 at press time. Clearpool’s stakeable governance token CPOOL rose 25% to trade around 19 cents, while Maple Finance’s MPL governance token rose 24% over the same period to $14.67, according to CoinGecko.

Read more: What is real-world asset tokenization (RWA)? A beginner’s guide

“Ondo also has a relatively small trading market cap compared to its fully diluted market cap, which also skews this number,” added Jow of Modular Capital. The protocol’s market capitalization is the number of tokens currently in circulation multiplied by the price of a single token, while a project’s FDV is the theoretical market capitalization of the project if all tokens were circulating on the market.

The market caps for Maple and Clearpool governance tokens are 78% and 60% of their FDV, respectively. In turn, ONDO’s market capitalization, which is USD 1.7 billion, constitutes less than 14.5% of its FDV.

In terms of total value locked, Ondo Finance remains the most popular parking spot among the three projects as cryptocurrency users locked $470 million in total value in Ondo Finance, $4.6 million in Clearpool and $1 million in Maple Finance, DefiLlama data shows.

While TVL Clearpool and Maple Finance remained relatively stable and did not see significant growth in May, TVL Ondo increased by $117.85 million from the beginning of the month from $352.67 million.

The role of Ondo Finance in the RWA sector

Ondo Finance is a tokenized real-world asset platform that has two flagship products: USDY for individuals and OUSG for individuals who meet certain “qualified buyer” requirements. Per Ondo Finance documents USDY “is a tokenized note backed by short-term U.S. Treasuries and bank demand deposits,” designed to function as a stablecoin with a U.S. dollar-denominated yield, while OUSG “provides seamless exposure to short-term U.S. Treasuries with 24/7 tokenized subscriptions and redemptions.”

Artemis says Ondo will make the RWA sector the best-performing sector in May, with Ondo Finance applied earlier this month to Arbitrum’s Stable Treasury Endowment program, which aims to diversify 35 million ARB tokens into stable real-world assets backed by treasury bills and money market instruments.

Ondo Finance is also affiliated with BlackRock’s BUIDL fund, which has a market capitalization of $473 million. According to the documents, “a “vast majority” of OUSG Ondo’s portfolio is currently held in BlackRock’s BUIDL fund.” Additionally, data from the Etherscan blockchain explorer to introduce that Ondo Finance holds 10.5% of BUIDL.

CoinDesk reported in March 2024, Ondo transferred $95 million of its assets backing the OUSG token from BlackRock’s iShares Treasury Bond ETF to Blackrock’s tokenized BUIDL fund.

“The results of the RWA space are to be expected,” wrote Jim Hwang, chief operating officer at Firinne Capital, in a text message to Unchained. “We are starting to see a fusion of real-world and onchain finance, which opens up the potential for both domains.”