Article source: WolfDAO
In September 2024, OpenEden received strategic investment from Binance Labs, the venture capital and incubation arm of Binance. Binance Labs has always been committed to identifying, investing in, and empowering potential blockchain entrepreneurs, startups, and communities. This investment in OpenEden reflects their optimism about the RWA field and their trust in the OpenEden team.
Reading Highlights
Overview of OpenEden's on-chain US Treasury bond protocol
OpenEden's project operational mechanism and advantages
OpenEden competes alongside protocols like Ondo
OpenEden's latest market data
Future outlook of OpenEden
Overview of OpenEden
OpenEden is an RWA (Real World Asset) tokenization protocol, currently primarily focused on the on-chain US Treasury bond sector. 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 already launched its first product - OpenEden TBill Vault. This product aims to allow USDC holders to earn returns by minting TBILL tokens.
Currently, the TVL is $125 million, positioned in the mid-range of the sector, and there is only one product: $TBILL. Its highlight is that the team has established a reserve mechanism, which helps investors quickly exit liquidity; the reserve ratio is dynamically adjusted by the team in real-time.
Development history of OpenEden
The project was founded in 2022 by two former senior regulatory officials from the Gemini exchange. Jeremy Ng and Eugene Ng, with their rich experience in the financial field, saw the enormous potential of real-world asset (RWA) tokenization, thus establishing OpenEden. They are dedicated to building a bridge to the new financial system, providing investors with more diversified investment options.
Jeremy Ng (Co-Founder)
Highlights: CFA (2002), Goldman Sachs, JPMorgan, Deutsche Bank, Leonteq, Gemini.
Eugene Ng (Co-Founder)
Highlights: Barclays Capital, Citigroup, Deutsche Bank, Matrixport, Gemini, DWF LABS.
Graduated with top grades from Singapore Management University, majoring in Business Administration, obtained a master's degree in Finance from Hong Kong University of Science and Technology, and later achieved a master's degree in International Finance with top grades from New York University Leonard N. Stern School of Business.
In April 2023, OpenEden launched its first product - OpenEden TBill Vault. This product aims to allow USDC holders to earn returns by minting TBILL tokens.
In September 2024, OpenEden received strategic investment from Binance Labs. This investment from Binance Labs brings new development opportunities to OpenEden. It is not only a recognition of 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 project lock-up TVL peak of $150 million, ranking among the top five global tokenized treasury bond issuers. Although overall data has since declined, it remains in a relatively leading position.
OpenEden's unique operational mechanism
OpenEden, as an RWA (Real World Asset) tokenization protocol, primarily focuses on the on-chain US Treasury bond sector, with a unique operational mechanism.
Firstly, OpenEden provides users with a new channel to invest in US Treasury bonds by directly investing most of its assets in off-chain short-term US Treasury bonds. In the investment process, OpenEden strictly enforces KYC and AML checks to ensure investment safety and regulatory compliance. At the same time, a small portion of USDC is kept on-chain to ensure instant withdrawals around the clock, providing liquidity assurance for users.
Secondly, OpenEden launched its first product - OpenEden TBill Vault, allowing USDC holders to earn returns by minting TBILL tokens. TBILL tokens are backed by short-term US government treasury bills and guaranteed for value and reliability by a reverse repurchase agreement. During the issuance process, OpenEden employed advanced technology to ensure the safety and stability of the tokens.
$TBILL is an RWA token based on the ERC-20 standard used by OpenEden, pegged to 1 US dollar, with the yield fluctuating in accordance with short-term US Treasury bills TBill. Currently, a total value of 110 million dollars of TBILL has been minted, with a YTM of 4.31%.
To purchase $TBILL, investors must first pass OpenEden's KYC certification. The protocol requires that investors must meet the definition of 'Professional Investors' as defined by the British Virgin Islands (Securities and Investment Business Act 2010), as well as the criteria for 'Accredited Investors' established by Regulation D 501(a) under the Securities Act. Only investors with assets exceeding $1 million can meet these conditions.
After passing KYC certification, investors transfer $USDC to the designated $TBILL address, and assets are purchased by the fund manager on behalf of Coinbase Prime as the token issuer, with custody provided by an off-chain custodian. The minted RWA tokens are then sent to the investors' registered whitelisted wallets, completing the entire purchase process.
In addition, OpenEden has also collaborated with Solayer to launch the tokenized US Treasury stablecoin sUSD, providing investors with more investment options. sUSD operates using Solayer's Request for Quotation (RFQ) protocol to match engines for decentralized trading markets. Users can submit quotes in USDC, and the system will automatically match them to qualifying tokenized institutions, tokenizing US Treasury bonds (RWA) on-chain to generate sUSD. All transactions are executed automatically by smart contracts without the need for third-party fund custody, ensuring transparency and security in transactions.
In summary, OpenEden's operational mechanism provides a safe, convenient, and efficient investment method by tokenizing US Treasury bonds, while also offering a new avenue for the integration of traditional finance and the crypto world.
OpenEden's significant development advantages
OpenEden has many notable features and advantages, standing out in the RWA platform.
1. Invest in US Treasury bonds, with attractive returns, expected annualized yield of 5.5%
OpenEden provides investors with a channel to invest in US Treasury bonds, currently offering an expected annualized return close to 5%, which is quite attractive compared to many traditional low-interest wealth management channels and some highly volatile crypto investment categories. OpenEden's US Treasury bond investments bring higher returns to investors.
2. Flexible trading: unrestricted by US trading hours and supports 24/7 redemption
One of OpenEden's major features is breaking the 'shackles' of traditional US Treasury bond investment limited to US trading hours. Leveraging the borderless nature of blockchain technology, users can freely conduct US Treasury bond purchases at any time 24/7. This provides great convenience for investors, who need not worry about trading time limitations and can invest according to their needs anytime. Additionally, users can 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, with its solid operational foundation, rigorous compliance risk control system, and innovative and efficient business structure, successfully earned an 'A' rating from Moody's. As a globally renowned and highly credible rating agency, this move undoubtedly affixed a 'high-quality asset' label to OpenEden, enabling it to stand out in the mixed RWA market and becoming a trusted quality target for 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 declined to nearly $125 million), and its collaborative landscape continues to expand, successfully attracting over 150 institutional clients to join in 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, helping to propel the project's continuous development.
Competing alongside Ondo Finance
OpenEden and Ondo Finance both focus on the asset tokenization field, but there are many differences in their business focus and operational logic.
In terms of business model
OpenEden primarily focuses on the on-chain US Treasury bond sector, providing a channel for investors to invest in US Treasury bonds by directly investing most of its assets in off-chain short-term US Treasury bonds. Additionally, OpenEden has made several improvements to the Vault, including on-chain price oracles, faster smart contract transactions, Uniswap widgets, enhanced security, institutional-grade protections, and user interface improvements.
Ondo Finance launched a tokenized fund to provide institutional investors with opportunities to invest in US Treasury bonds and institutional-grade bonds. Its product OUSG mainly offers liquidity exposure to short-term US 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%, with a high investment return.
The yield of Ondo Finance is relatively close to OpenEden. However, there may be differences in the stability of returns and risks, as OpenEden's value and reliability are guaranteed by a reverse repurchase agreement and has received a Moody's rating of 'A', providing certain advantages in investment value and reliability.
Current market development of OpenEden
OpenEden performed poorly last year, with TVL hovering below $20 million. However, it has seen explosive growth this year, with TVL accelerating in the second half, growing from $35 million to $100 million within three months.
The poor performance of OE in the first half of the year was largely due to competition pressure from the US Treasury RWA project in Singapore: MatrixDock.
MatrixDock is an RWA protocol under the cryptocurrency asset management platform MatrixPort led by Wu Jihan, aimed at providing KYC-approved users with exposure to TBill risks, with its RWA token being $STBT.
In September last year, the RWA treasury bond landscape was mainly composed of Franklin Templeton, Ondo, MatrixDock, Backed, Maple, OpenEden, etc.
$STBT's TVL was approximately $80 million at the time, reaching a peak of $100 million, but the positions of both have now effectively swapped in the treasury bond sector. This may be partly due to OpenEden's active business expansion, resulting in TVL growth; on the other hand, it also benefits from their persistent operation on Twitter, achieving a certain level of exposure, ultimately forming a snowball effect.
At this stage, OpenEden is showing a strong development trend in the market. Its tokenized US Treasury bonds peaked with a TVL surpassing $150 million, ranking among the top five global tokenized treasury bond issuers. Although OpenEden's market share in the RWA market is currently relatively small, its growth rate is quite fast.
Future development prospects of OpenEden
In the current trend of on-chain asset tokenization, OpenEden, with its focus on US Treasury bonds and a series of advantages, demonstrates tremendous development potential.
Launch of tokenized US treasury bonds on the XRP ledger
Institutional investment collaboration, Ripple plans to establish a fund and invest $10 million in specific TBill tokens
In collaboration with Solayer, launched tokenized US Treasury stablecoin sUSD, providing investors with more investment options.
With the continuous development of on-chain asset tokenization trends, OpenEden is expected to occupy a larger share in the RWA market.
However, OpenEden also faces some challenges in its development process. Compared to competitors, OpenEden holds a relatively small market share and needs to continuously strive and innovate to enhance its competitiveness. At the same time, OpenEden must also confront the uncertainties of regulatory policies and the risks posed by technological innovations.
Recently obtained strategic investment from Binance (amount undisclosed), its exposure and product positioning may propel OpenEden into a new development stage.
Additionally, when assessing OpenEden's future prospects, we can also refer to the successful experience of Ondo Finance:
The Ondo Finance team has an excellent TradiFi background, with members from renowned institutions such as Goldman Sachs and Merrill Lynch. The protocol itself has a good relationship with BlackRock and possesses strong capital backing for TVL support, combined with good market operations after the issuance, it has become the largest leader in the RWA field.
The OpenEden team also has a good financial background and has now received support from Binance. Due to compliance reasons, many tokens cannot be issued in the treasury market. If the OE team can solve this problem and successfully issue tokens, it will be the second RWA token for treasury bonds, and its future development prospects are very promising.
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