In September 2024, OpenEden received strategic investment from Binance Labs, the venture capital and incubation arm of Binance. Binance Labs has been dedicated to identifying, investing in, and empowering promising blockchain entrepreneurs, startups, and communities. This investment in OpenEden reflects its optimism about the RWA field and trust in the OpenEden team.
Reading highlights
Overview of OpenEden's U.S. treasury on-chain protocol
OpenEden project operation mechanism and project advantages
OpenEden's competition with protocols like Ondo
Latest market data of OpenEden
Future outlook for OpenEden
Overview of OpenEden
OpenEden is an RWA (real-world asset) tokenization protocol, currently primarily focusing on the on-chain U.S. treasury bond field. It was established in early 2022 by Jeremy Ng, former head of Asia-Pacific at Gemini, and Eugene Ng, former head of business development in the Asia-Pacific region. OpenEden has released its first product - OpenEden TBill Vault. This product aims to allow stablecoin USDC holders to earn returns by minting TBILL tokens.
Currently, the TVL is $125 million, positioned in the midstream of the sector, with only the $TBILL product available at the moment. Its highlight is that the team has established a reserve mechanism that can help investors quickly exit liquidity, with the reserve rate dynamically adjusted by the team in real-time.
Development history of OpenEden
The project was founded in 2022 by two former senior regulatory executives from Gemini. Jeremy Ng and Eugene Ng, with their rich experience in the financial field, saw the huge potential of tokenizing real-world assets (RWA) and thus founded OpenEden. They are committed to building a bridge to a new financial system, providing investors with more diversified investment options.
Jeremy Ng (Co-Funder)
Highlights: CFA (2002), Goldman Sachs, JPMorgan, Deutsche Bank, Leonteq, Gemini.
Eugene Ng (Co-Funder)
Highlights: Barclays Capital, Citigroup, Deutsche Bank, Matrixport, Gemini, DWF LABS.
Graduated with top grades from Singapore Management University, majoring in Business Administration, completed a master's degree at Hong Kong University of Science and Technology, obtaining a Master's in Finance, and later achieved a Master's in International Finance with top grades from NYU Stern School of Business.
In April 2023, OpenEden launched its first product - OpenEden TBill Vault. This product aims to allow stablecoin USDC holders to earn returns by minting TBILL tokens.
In September 2024, received strategic investment from Binance Labs. The investment from Binance Labs brings new development opportunities for OpenEden. This not only recognizes the OpenEden project but also provides strong financial support and resource integration capabilities for its future development.
In October of the same year, OpenEden rapidly expanded, reaching a peak annual TVL of $150 million, ranking among the top five global tokenized treasury bond issuers; although overall data has slightly declined, it still remains relatively in the forefront.
OpenEden's unique operating mechanism
OpenEden, as an RWA (real-world asset) tokenization protocol, primarily focuses on the field of on-chain U.S. treasury bonds, and its operating mechanism is unique.
Firstly, OpenEden provides users with a new channel for investing in U.S. treasury bonds by directly investing most of its assets in off-chain short-term U.S. treasury bonds. During the investment process, OpenEden strictly implements KYC and AML checks to ensure the safety of investments and regulatory compliance. At the same time, a small portion of USDC remains on-chain to ensure instant withdrawals at any time, providing liquidity assurance for users.
Secondly, OpenEden's first product - OpenEden TBill Vault allows stablecoin USDC holders to earn returns through minting TBILL tokens. TBILL tokens are supported by short-term U.S. government treasury bills and are guaranteed by a reverse repurchase agreement for their value and reliability. During the issuance process, OpenEden employs advanced technical methods to ensure the security and stability of the tokens.
$TBILL is the RWA token using the ERC-20 standard by OpenEden, each $TBILL is pegged to $1, and the yield varies with short-term U.S. treasury bills TBill. Currently, a total of $110 million worth of TBILL has been minted, YTM 4.31%.
To purchase $TBILL, investors must first go through OpenEden's KYC certification. The protocol requires investors to meet the definition of 'Professional Investors' as defined by the British Virgin Islands (Securities and Investment Business Act 2010), as well as the 'Accredited Investors' under Regulation D Rule 501(a) of the Securities Act in the U.S., which stipulates that only investors with assets over $1 million can meet the above criteria.
After passing KYC certification, investors send $USDC to the designated $TBILL address, which is purchased by Coinbase Prime as the token issuer from the fund manager, and entrusted to an off-chain custodian, while the minted RWA tokens are sent to the whitelist wallet registered by the investor, completing the entire purchasing process.
In addition, OpenEden has also collaborated with Solayer to launch the tokenized U.S. treasury stablecoin sUSD, providing investors with more investment choices. sUSD operates through Solayer's Request for Quote (RFQ) protocol, pairing engine for decentralized trading markets, where users can submit quotes through USDC, and the system automatically matches them to qualified tokenized institutions, tokenizing U.S. treasury bonds (RWA) and generating sUSD. All transactions are executed automatically by smart contracts, eliminating the need for third-party fund custody, ensuring transaction transparency and security.
In summary, OpenEden's operating mechanism provides investors with a safe, convenient, and efficient investment method by tokenizing U.S. treasury bonds, while also offering new pathways for the integration of traditional finance and the crypto world.
Significant development advantages of OpenEden
OpenEden boasts numerous notable features and advantages, standing out in the RWA platform.
1. Invest in U.S. treasury bonds with considerable returns, expected annualized return of 5.5%
OpenEden provides investors with a channel to invest in U.S. treasury bonds, currently offering an expected annualized return close to 5%, which is quite attractive compared to many traditional low-interest financial products and some highly volatile crypto investments. OpenEden's U.S. treasury investment brings higher returns to investors.
2. Flexible trading: Not restricted by U.S. trading hours and supports 24/7 redemptions
One of OpenEden's major features is that it breaks the 'shackles' of traditional U.S. treasury bond investments restricted by American trading hours, allowing users to freely conduct U.S. treasury purchases at any time 24/7 based on the borderless nature of blockchain technology. This provides investors with great convenience, eliminating concerns about trading time restrictions, allowing them to invest as needed at any time. Furthermore, users can also redeem TBILL 24/7, ensuring sufficient liquidity of funds.
3. Backed by authoritative ratings: the first RWA token to receive Moody's 'A' rating
As early as June 2024, OpenEden succeeded in obtaining an 'A' rating from Moody's thanks to its solid operational foundation, rigorous compliance risk control system, and innovative and efficient business structure. As a globally recognized and highly credible rating agency, Moody's move undoubtedly labels OpenEden as a 'high-quality asset', allowing it to stand out in the mixed RWA market and become a quality target trusted by many institutional and individual investors.
4. Cumulative TVL reached $150 million, attracting over 150 institutional clients
As of now, its locked value (TVL) has soared to over $150 million (currently slightly down to around $125 million), and its collaborative footprint continues to expand, successfully attracting over 150 institutional clients to join forces, building a large and active investment ecosystem. The participation of institutional clients further enhances OpenEden's market influence and credibility. Their involvement also brings more funds and resources to OpenEden, aiding in the continuous development of the project.
Competing alongside Ondo Finance
OpenEden and Ondo Finance both focus on the asset tokenization field, but there are many differences in business focus and operational logic.
In terms of business model
OpenEden mainly focuses on the field of on-chain U.S. treasury bonds, providing investors with a channel to invest in U.S. treasury bonds by directly investing most of its assets in off-chain short-term U.S. treasury bonds. At the same time, OpenEden has also made several improvements to Vault, including on-chain price oracles, faster smart contract transactions, Uniswap widgets, enhanced security, institutional-level guarantees, and user interface improvements.
Ondo Finance launched a tokenized fund, providing institutional investors with opportunities to invest in U.S. treasury bonds and institutional-grade bonds. Its product OUSG primarily provides liquidity exposure to short-term U.S. treasury bond ETFs, with the vast majority of the portfolio invested in iShares short-term treasury bond ETFs.
In terms of returns
OpenEden's expected annualized return is 5.5%, offering a high investment return.
The yield of Ondo Finance is relatively close to that of OpenEden. However, there may be differences in yield stability and risk between the two. OpenEden is backed by a reverse repurchase agreement to ensure its value and reliability, and has received a Moody's 'A' rating, giving it certain advantages in investment value and reliability.
Current market development of OpenEden
OpenEden struggled to operate last year, with TVL hovering below $20 million. However, it experienced an explosion this year, with TVL accelerating its growth in the second half, increasing from $35 million to $100 million within three months.
The reason for OE's poor performance in the first half is largely due to the competitive squeeze from the U.S. treasury RWA project MatrixDock, which is also based in Singapore.
MatrixDock is the RWA protocol under MatrixPort, a crypto asset management platform founded by Wu Jihan in Singapore, aimed at providing KYC-approved users with risk exposure to TBill, with its RWA token being $STBT.
In September last year, the RWA treasury bond landscape was primarily comprised of Franklin Templeton, Ondo, MatrixDock, Backed, Maple, OpenEden, and others.
$STBT had a TVL of about $80 million at that time, reaching $100 million at its peak, but now both have swapped positions in the treasury bond sector. This is possibly due to OpenEden's active business expansion, gaining TVL increment; on the other hand, it also benefits from their persistent operations on Twitter, gaining certain exposure and eventually forming a snowball effect.
At this stage, OpenEden has shown strong development momentum in the market. Its tokenized U.S. treasury bonds reached a peak TVL of over $150 million, ranking among the top five global tokenized treasury bond issuers. In the RWA treasury bond market, although OpenEden's market share is currently relatively small, its growth rate is rapid.
Future development prospects of OpenEden
In the current trend of asset tokenization on the blockchain, OpenEden demonstrates tremendous development potential due to its focus on U.S. treasury bonds and a series of advantages, such as:
Launch of tokenized U.S. treasury bills on the XRP ledger
Institutional investment cooperation, Ripple plans to establish a fund and invest $10 million in specific TBill tokens
Collaborating with Solayer to launch the tokenized U.S. treasury stablecoin sUSD, providing investors with more investment choices.
With the continuous development of the trend of asset tokenization on the blockchain, OpenEden is expected to occupy a larger share in the RWA market.
However, OpenEden also faces some challenges during its development. In comparison with competitors, OpenEden has a relatively small market share and needs to continuously strive and innovate to enhance its competitiveness. At the same time, OpenEden also needs to deal with the uncertainty of regulatory policies and the risks brought by technological innovation.
Newly received strategic investment from Binance (amount undisclosed), its exposure and product positioning may propel OpenEden into a new stage of development.
Additionally, for assessing OpenEden's future prospects, we can also refer to the successful experience of Ondo Finance:
The Ondo Finance team has an outstanding TradiFi background, with members from well-known institutions such as Goldman Sachs and Merrill Lynch, while the protocol itself maintains good relations with BlackRock and has a strong financial backing for TVL support. After issuing tokens, it has successfully become the largest leading entity in the RWA field.
The OpenEden team also has a solid financial background and has now received support from Binance; currently, due to compliance reasons, many tokens cannot be issued in the treasury market. If the OE team can resolve this issue and successfully issue tokens, it will become the second treasury RWA token, and its future development prospects are highly anticipated.
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