RedStone, a decentralized oracle provider, launched « Settle » on May 15, an on-chain settlement layer designed to address the liquidity mismatch preventing tokenized real-world assets from entering DeFi lending markets. Approximately $30 billion in tokenized assets, primarily US Treasuries and private credit vehicles, remain dormant on-chain due to redemption cycles of 60 to 180 days that are incompatible with the near-instant liquidation needs of DeFi lending protocols like Aave and Morpho. The mechanism operates through on-chain auctions where liquidity providers take over positions by accepting long redemption timelines in exchange for a discount on the underlying asset. While this solution creates a new revenue opportunity for market makers willing to absorb redemption risk, it introduces centralization risk since RedStone’s oracle and auction infrastructure becomes a critical dependency. Morpho currently holds over $620 million in RWA deposits while Aave Horizon has attracted approximately $423.5 million.
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