Following the recent Mantra scandal, Quinn Thompson, the founder and Chief Investment Officer of Lekker Capital, has flagged concerns about another RWA project, Ondo Finance.
On April 14, Thompson took to X to reiterate his caution regarding Ondo Finance (ONDO) in light of the Mantra incident, noting, “Given the recent Mantra $OM token scam, it seems wise to circulate this thread on $ONDO, hoping to save at least one individual from potential financial disaster.”
In his post, Thompson revived a previous thread from March 18, where he sought verification from on-chain analysts regarding claims that Ondo Finance’s Total Value Locked (TVL) is artificially inflated due to the team selling tokens and reinvesting the proceeds back into the protocol to simulate genuine user growth.
“Can one of the on-chain investigators verify whether the majority of Ondo’s TVL… comes from the team selling $ONDO tokens and reinvesting the returns into the protocol to create an impression of organic growth?” he inquired.
To bolster his assertions, Thompson referenced an earlier post from October 2024, where he criticized the project’s $7B fully diluted valuation, despite it generating no revenue and providing products (USDY and OUSG) that merely act as wrappers for Blackrock’s BUIDL.
He highlighted the company’s 0.15% take rate, which is currently waived until 2025, indicating that the protocol is not earning any revenue despite its significant TVL. He argued that once the fee takes effect, users are likely to transfer their funds to BUIDL due to its safety, lower costs, and better yields. Even with the introduction of the fee, Thompson estimated that Ondo would generate around $975K annually. “That results in a revenue multiple of over 7,000x FDV for a nearly zero-margin business with no competitive edge and increasing competition,” he stated.
In response, a user known as @TimiBot commented, “I thought this was an open secret,” along with a screenshot of what seems to be a shared message from a Telegram group. The message describes the supposed mechanisms behind Ondo’s inflated TVL.
This indicates that while the funds in TVL are indeed real, Ondo Finance’s TVL figure could be misleading as much of the capital in the protocol is not being utilized in DeFi, but rather is placed in tokenized U.S. Treasury Bills—low-risk traditional financial instruments.
To summarize, Ondo Finance might be artificially inflating its TVL by selling their own ONDO tokens and then reinvesting that cash back into their protocol. The money invested in T-Bills is also counted toward the reported TVL, but it is not actually engaged in DeFi activities such as lending, borrowing, or trading. Both strategies create a deceptive representation of the protocol’s true level of adoption.