ChainCatcher report: Decentralized oracle service RedStone has officially launched RedStone Settle, a settlement layer product designed for decentralized finance, aimed at addressing structural barriers to using tokenized real-world assets (RWA) as collateral in lending protocols. The product’s core mechanism is an on-chain auction: when a lending protocol triggers a liquidation event, liquidity providers can immediately step in to purchase the associated positions, providing instant liquidity to the protocol while assuming the delayed redemption risk of the underlying assets. This aims to bridge the mismatch between the near-instant liquidations required by DeFi platforms like Aave and the typical 60- to 180-day redemption cycles of RWAs, including tokenized funds and bonds. RedStone states that this solution has the potential to unlock over $30 billion in tokenized RWAs currently idle within DeFi, enabling users to borrow more efficiently against interest-bearing positions. According to data from RWA.xyz, the tokenized RWA market size, excluding stablecoins, has already exceeded $30 billion, primarily driven by exposure to U.S. Treasuries and private credit products.
RedStone Launches Settlement Layer to Address the RWA Liquidity Gap in DeFi
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Summary
RedStone Settle, a new settlement layer from RedStone, aims to resolve liquidity issues in real-world assets (RWA) by using on-chain auctions. The tool enables liquidity providers to instantly purchase positions during liquidations, bypassing RWA’s 60–180-day redemption delays. This could unlock over $30 billion in tokenized RWA, enhancing the efficiency of DeFi lending. The RWA market, excluding stablecoins, now exceeds $30 billion, led by U.S. Treasuries and private credit. RedStone states that this solution helps mitigate DeFi exploit risks associated with slow asset redemptions.
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