Tokenized stock on-chain volume surpasses $1 billion: How does Ondo Finance hold a significant share?

In the first quarter of 2026, the tokenized stocks (Tokenized Stocks) sector reached a clear tipping point. According to RWAxyz data, the on-chain total value of tokenized stocks first broke through the $1 billion mark. Over the past twelve months, this figure has grown nearly 29x, expanding from roughly $35 million at the beginning of 2025 to the $1 billion scale today.

In this market, Ondo Finance holds about 58% of market share, and together with Backed Finance’s xStocks platform (about 24%) forms a duopoly structure in the sector. Ondo’s tokenized stocks product, Ondo Global Markets, currently supports 265 tokenized assets, covering U.S. stocks such as Tesla and Nvidia, as well as assets like the S&P 500 index, along with multiple categories including China-concept stocks and bonds.

This breakthrough is not an isolated event. The total size of the entire RWA tokenization sector has already exceeded $340 billion. U.S. Treasuries, gold, and even commodities are all being digitized through blockchain-based mapping. Tokenized stocks surpassing $1 billion marks that the lateral expansion of RWA asset types—from government bonds into equities—is accelerating.

What drives Ondo Finance’s dominant position

Ondo’s dominance in the tokenized stocks market is not accidental; it is the result of several structural factors working in tandem.

First is the completeness of its product matrix. Ondo has built a system spanning three major product lines: OUSG (tokenized Treasuries, TVL of about $704 million), USDY (yield-bearing stablecoin, market cap of about $683 million), and Ondo Global Markets (tokenized stocks, 58% market share). This matrix differentiates Ondo from most RWA protocols that focus on a single asset, creating a full product line that strongly aligns with traditional financial institutions’ asset-allocation logic.

Second is the institutional-grade compliance framework. Ondo is a brokerage and alternative trading system (ATS) license holder registered with the U.S. SEC. Its underlying assets are custodied with qualified third-party institutions (including BlackRock’s BUIDL fund and BNY Mellon, etc.), and it performs independent daily accounting and annual audits. In November 2025, the SEC concluded its two-year investigation into Ondo without recommending charges. This regulatory validation forms a moat that competitors are difficult to replicate.

Third is the first-mover advantage and the institutional partnership network. From the integration of BlackRock’s BUIDL fund to the joint issuance of five tokenized ETFs by Franklin Templeton, Ondo has become an important on-ramp for traditional finance giants to enter the on-chain world. Each time TVL jumps, it is almost always accompanied by a catalyst such as an institutional partnership or an event related to regulation. This kind of synergy is extremely rare in the RWA sector.

What costs does this market structure create

Dominant positions often come with structural costs and constraints.

The first challenge is liquidity fragmentation risk. Tokenized stocks products do not directly hold the underlying stocks. Instead, they achieve price anchoring through compliant brokerage and custody structures. This means each tokenized stock asset requires its own brokerage and custody arrangements; as asset size expands, operational complexity and costs grow in a linear fashion.

A second structural problem is the misalignment in capturing value through governance tokens. As of April 3, 2026, according to Gate market data, the ONDO token price is $0.2736, while Ondo’s platform TVL is already approaching $2.92B, making the market cap / TVL ratio only 0.45. This ratio is extremely rare among DeFi top protocols, reflecting a significant disconnect between governance tokens and the platform’s actual locked-in value. The market is still questioning whether the ONDO token can effectively capture the value upside created by growth in the RWA sector.

Tensions between product innovation and compliance speed are also increasing. Ondo’s tokenized stocks products cover 265 assets, but regulatory requirements vary widely across different jurisdictions. In the U.S. market, directly offering tokenized stocks to retail investors still faces legal uncertainty, which limits penetration in the domestic market.

What does this mean for the crypto and Web3 industry landscape

Ondo’s dominance has far-reaching implications for the industry landscape, reflected in three areas.

First, the competitive barrier of the RWA sector is being raised systematically. Building a compliance framework, institutional partnership relationships, and a product matrix requires years of accumulation; new entrants cannot replicate Ondo’s competitive moat in the short term. The industry is shifting from a “who can issue tokens faster” competition to a “who can make institutions trust them” competition logic.

Second, ETF applications signify institutional, structural confirmation of the asset class. On February 6, 2026, 21Shares filed with the SEC a 21Shares Ondo Trust prospectus to launch a spot ETF tracking the performance of the ONDO token, with plans to list on Nasdaq. This marks ONDO entering an ETF application sequence previously occupied only by Bitcoin and Ethereum. If approved, the ETF would provide a compliant investment channel for institutional and retail investors that does not require managing private keys or performing on-chain operations, potentially bringing a new inflow of institutional capital to the RWA sector.

Third, a “dual liquidity” structure for tokenized assets is taking shape. There is a complex feedback relationship between the on-chain versions of traditional financial assets (such as tokenized stocks) and on-chain native tokens (such as ONDO). ETF applications imply that regulators are beginning to examine the two under the same framework, which may gradually converge the pricing logic of the two categories of assets.

How it may evolve in the future

There are at least three possible paths for the future evolution of Ondo and the RWA sector.

Optimistic scenario: ETF approval and accelerated inflows of institutional capital. If 21Shares’ ONDO spot ETF is approved in 2026, it would open a new channel of incoming funds for the ONDO token through traditional exchanges. Referring to market reactions after Bitcoin and Ethereum ETF approvals, even if the inflow scale is not as large as the former, the event itself would significantly increase ONDO’s visibility among institutional investors. Meanwhile, the five tokenized ETFs jointly launched by Ondo and Franklin Templeton have been rolled out across multiple countries, covering asset categories such as U.S. stocks, bonds, and gold. If this partnership model is replicated by more traditional asset management institutions, it could trigger an exponential expansion of Ondo’s product line.

Base scenario: TVL continues to grow, but the token price lags. The current state—TVL at roughly $2.92B and the market cap / TVL ratio at just 0.45—may continue to persist. In this scenario, Ondo continues to accumulate value as an RWA infrastructure, but the price discovery mechanism for governance tokens remains immature. The market needs clearer upgrades to token economics (such as protocol fee distribution or buyback mechanisms) to close this valuation gap.

Cautious scenario: Regulatory uncertainty constrains the pace of expansion. Although Ondo has obtained multiple compliance approvals, the regulatory framework for tokenized stocks is still fragmented globally. If the CLARITY Act in the U.S. market passes, RWA projects with clear legal boundaries will be the first to benefit. However, the timing of the bill’s progress and the final text remain uncertain. In addition, full implementation of Europe’s MiCA regulations will bring new compliance costs, which could delay Ondo’s expansion pace in the European market.

Potential risks and structural constraints

From a risk scenario analysis perspective, at least the following four dimensions need attention.

Pressure from token supply releases. In January 2026, 1.94 billion ONDO tokens completed an unlock, accounting for about 40% of the circulating supply. On-chain data shows that after the unlock, whale addresses continue to accumulate in the $0.35 to $0.40 range. But if large-scale sell-offs occur afterward, it could create ongoing downward pressure on the price.

Risk of a value decoupling between the asset side and the token side. Users of products such as OUSG and USDY do not necessarily need to hold ONDO tokens to use the platform services. This means that even if the platform’s TVL continues to grow, the ONDO token’s valuation could remain for a long time below the level implied by the fundamentals. This structural value-capture dilemma is a common problem faced by RWA governance tokens.

Competitive pressure to catch up. Although Ondo currently holds 58% share, competitors such as xStocks (24% share) are accelerating their expansion. At the same time, traditional financial institutions (such as BlackRock and Franklin Templeton) are also exploring their own tokenization solutions. If they choose to bypass existing RWA protocols and directly issue on-chain products, it would impact Ondo on the asset side.

Fragmentation challenges in cross-border compliance. Ondo has obtained approval from the Financial Market Authority in Liechtenstein, allowing it to provide tokenized stocks and ETFs in 30 European countries. But in Asia and the Middle East, regulatory frameworks are still being built. Differences in compliance requirements across jurisdictions may limit Ondo’s expansion efficiency in these fast-growing markets.

Summary

The tokenized stocks on-chain scale surpassing $1 billion is a key signal that the RWA sector’s lateral expansion is shifting from government bonds into equity assets. Ondo Finance has established an absolute dominant position in this emerging niche sector with 58% market share. Its competitive moat that competitors struggle to replicate in the short term is built jointly by its product matrix completeness, institutional-grade compliance architecture, and first-mover partnership relationships.

By submitting its ONDO spot ETF application, 21Shares has brought this token into the category of institutional consideration previously occupied only by Bitcoin and Ethereum. However, the significant valuation mismatch between governance tokens and platform locked-in value, the absence of a value-capture mechanism in the token economics model, and the fragmentation of the global regulatory environment together form the core structural challenges facing Ondo and the RWA sector.

The long-term narrative logic of the RWA sector is shifting from “who can issue assets faster” to “who can win institutional trust and operate continuously.” In this dimension, Ondo has already built a significant first-mover advantage. But whether the gap between asset-side scale and token-side valuation can be bridged will determine whether this advantage can be converted into sustainable ecosystem value.

FAQ

Q: What are tokenized stocks?

Tokenized stocks are products that digitally map traditional stock assets through blockchain technology. They do not directly hold the underlying stocks. Instead, they achieve price anchoring through compliant brokers and custody structures, enabling users to gain exposure on-chain to assets such as U.S. stocks.

Q: What is Ondo Finance’s market share in tokenized stocks?

As of April 2026, Ondo Finance holds about 58% market share in the tokenized stocks market, and the tokenized stocks on-chain total scale has already surpassed $1 billion.

Q: What is the progress of the ONDO spot ETF application submitted by 21Shares?

On February 6, 2026, 21Shares submitted the 21Shares Ondo Trust prospectus to the SEC, intending to launch a spot ETF tracking ONDO token performance, planned to list on Nasdaq, with Coinbase Custody as the custodian. If approved, it will provide investors with a compliant way to invest in ONDO tokens through traditional stock market channels.

Q: What is the latest price of the ONDO token?

As of April 3, 2026, according to Gate market data, the ONDO token price is $0.2736. Please note that crypto asset prices are highly volatile; the above data is for informational purposes only.

Q: What are Ondo Finance’s core products?

Ondo Finance’s core products include OUSG (tokenized short-term U.S. Treasury fund, TVL of about $704 million), USDY (a yield-bearing stablecoin supported by short-term U.S. Treasuries and bank deposits, market cap of about $683 million), and Ondo Global Markets (a tokenized stocks platform supporting 265 assets).

Q: What are the main risks facing the RWA sector?

Major risks include regulatory uncertainty (the global regulatory framework for tokenized assets is still being built), the absence of a governance token value-capture mechanism (a decoupling between platform TVL growth and token valuation), and the tension between compliance costs and the pace of asset expansion.