RedStone Launches Settlement Layer to Address RWA Liquidity Gap in DeFi Lending

Decentralized oracle provider RedStone has introduced RedStone Settle, a new settlement layer designed to address the liquidity gap for tokenized real-world assets (RWAs) in DeFi lending. The system tackles the mismatch between DeFi lending platforms' need for near-instant liquidations and the 60-180 day redemption periods typical of RWAs like tokenized funds and bonds. RedStone Settle introduces an onchain auction mechanism during liquidations, allowing liquidity providers to purchase positions immediately, thereby supplying protocols with liquidity while assuming the delayed redemption risk. This innovation aims to unlock over $30 billion in idle tokenized RWAs and improve borrowing efficiency against yield-generating positions. The launch occurs amidst ongoing discussions about whether tokenization alone truly enhances liquidity for illiquid assets, highlighting that simply putting assets onchain does not automatically make them tradable or usable in financial markets.

(Source：Cointelegraph)