A novel diplexer-based fully passive transponder is presented in this paper, which targets sub-6-GHz 5G-compatible internet-of-things applications. To alleviate the antenna design restrictions of traditional transponder with two separate antennas, a new architecture has been proposed with the introduction of a diplexer, which allows transponder to simply employ a dual-band antenna. In this paper, a dual-band circularly polarized omnidirectional spiral slot antenna, with enhanced bandwidth and gain performance, is designed as the transponder Tx/Rx antenna. Besides the new architecture, a diode selection criterion is proposed as well. Analytical models are derived, showing relationships between the diode's SPICE parameters and the conversion efficiency or conversion loss (CL) of such diode-based transponders. With help of the analysis, transponder designers can easily identify diodes to implement transponders with better performance. Under the guidance of the criterion, low-barrier diode SMS7630 is chosen for verification. Measured CL results of the transponder circuitry part show a noticeable improvement over the state-of-the-art works. The complete prototype was tested with radar's transmitting power of 25 dBm, and it presents a maximum read-out distance up to 7 m when the operating fundamental frequency is 3.5 GHz.