In the aftermath of the Mantra DAO (OM) collapse, Quinn Thompson—founder and Chief Investment Officer of Lekker Capital—has reignited concerns about another major real-world asset (RWA) protocol: Ondo Finance (ONDO). The warning, shared on April 14 via X (formerly Twitter), comes as scrutiny mounts across the RWA sector amid heightened concerns over transparency and tokenomics.
Drawing Parallels With Mantra
Thompson referenced the recent Mantra OM token fallout, which saw a 90% crash in token value, wiping out over $5 billion in market cap. He described the situation as a wake-up call and urged investors to revisit his previous critiques of Ondo Finance, saying:
“In light of the recent Mantra $OM token scam, probably prudent to recirculate this thread on $ONDO in case it saves at least one person from the eventual financial ruin.”
In doing so, Thompson resurfaced a thread from March 18, where he raised critical questions regarding Ondo’s Total Value Locked (TVL) figures and alleged that the protocol might be artificially inflating its TVL by selling ONDO tokens and routing the proceeds back into the protocol.
Allegations of Artificial TVL Inflation
In his original post, Thompson called upon on-chain investigators to verify whether the majority of Ondo’s TVL stems from internal capital recycling, rather than genuine user adoption.
“Can one of the on-chain investigators confirm for me if it is true that the majority of Ondo’s TVL… is from the team’s selling of $ONDO tokens with the proceeds funneled back into the protocol to give off the appearance of organic growth?”
The concern, he argues, is that such practices inflate TVL metrics, giving the illusion of robust protocol health while failing to reflect real, external user participation.
Questioning Fundamentals and Business Model
Thompson also revisited his October 2024 analysis, where he criticized Ondo’s valuation and product strategy. At the time, he questioned how the project had achieved a $7 billion fully diluted valuation (FDV) despite generating no revenue. He characterized products like USDY and OUSG as “just wrappers on BlackRock’s BUIDL,” adding that the protocol’s 0.15% take rate had been waived until 2025.
He argued that once Ondo begins charging this fee, most users will likely move their funds to BUIDL, which offers higher security, lower fees, and better yields. Even with fees active, the projected annual revenue would be only around $975,000, making the FDV-to-revenue multiple an eye-watering 7,000x for a business with thin margins and no defensible moat.
Community Reaction and Further Insight
Thompson’s warning prompted reactions from within the crypto community. One user, @TimiBot, replied:
“Thought this was an open secret,”
He attached a screenshot from a Telegram chat, detailing how Ondo allegedly recycles token sales into its own protocol to bolster TVL. The message suggests that although the funds reported in Ondo’s TVL are real, they do not contribute to core DeFi activities like lending, borrowing, or trading.
Instead, the funds are largely parked in tokenized U.S. Treasury Bills, meaning the capital is not being used in yield-generating or risk-based strategies typical of DeFi protocols. This leads to a misleading representation of adoption and value creation.
Final Thoughts
As the dust settles from the Mantra DAO implosion, Quinn Thompson’s renewed focus on Ondo Finance has reignited the conversation around TVL as a performance metric, especially in RWA-focused projects. If Ondo is indeed engaging in circular capital flows and inflated reporting, it could face intensified scrutiny from both regulators and investors.
In an industry where trust and transparency are increasingly critical, projects relying on inflated metrics and opaque tokenomics may find themselves at the center of the next fallout.
