RedStone has launched a settlement layer aimed at addressing the liquidity gap of RWA in DeFi lending
The decentralized oracle service provider RedStone has officially launched the settlement layer product RedStone Settle for defi-119">decentralized finance, aimed at addressing the structural barriers faced when tokenized real-world assets (RWA) are used as collateral in lending protocols.
The core mechanism of this product is on-chain auctions: when a lending protocol triggers a liquidation event, liquidity providers can immediately step in to purchase the relevant positions, providing instant liquidity to the protocol while assuming the risk of delayed redemption of the underlying assets. This move aims to bridge the mismatch between the nearly instant liquidation required by DeFi platforms (such as Aave) and the typical redemption periods of 60 to 180 days for RWAs (including tokenized funds and bonds).
RedStone stated that this solution is expected to activate the currently idle tokenized RWAs in DeFi, which exceed $30 billion, and enable users to borrow more efficiently using interest-bearing positions. According to data from RWA.xyz, excluding stablecoins, the current market size of tokenized RWAs has surpassed $30 billion, primarily dominated by exposure to U.S. Treasury bonds and private credit products.
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