RedStone Launches Settlement Layer to Address RWA Liquidity Gaps in DeFi Lending
According to Cointelegraph, decentralized oracle service provider RedStone has officially launched RedStone Settle, a settlement layer product designed for decentralized finance (DeFi), aiming to address structural barriers hindering tokenized real-world assets (RWAs) from being used 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 relevant positions, supplying instant liquidity to the protocol while independently bearing the risk of delayed redemption of the underlying assets. This aims to bridge the mismatch between the near-instant liquidations required by DeFi platforms (e.g., Aave) and the typical 60- to 180-day redemption periods associated with RWAs—including tokenized funds and bonds.
RedStone states that this solution could unlock over $30 billion worth of tokenized RWAs currently idle in DeFi, enabling users to borrow more efficiently against interest-bearing positions. According to data from RWA.xyz, the current market size of tokenized RWAs—excluding stablecoins—exceeds $30 billion, primarily driven by U.S. Treasury exposure and private credit products.
