RedStone has launched a new settlement layer designed to make tokenised real-world assets usable as collateral in decentralised finance lending markets.
The system, called RedStone Settle, addresses a key mismatch between instant DeFi liquidations and the 60 to 180 day redemption periods typical of RWAs such as tokenised bonds and funds.
It introduces an onchain auction mechanism that allows liquidity providers to step in during liquidation events, providing immediate liquidity while taking on delayed redemption risk.
The company said the approach could unlock more than $30 billion in tokenised RWAs currently sitting idle in DeFi and improve capital efficiency for users borrowing against yield-generating assets.
“I think there’s still this idea that tokenising something illiquid will somehow magically make it a liquid asset, which is just not true,”
Said Oya Celiktemur.
The launch comes as debate continues over whether tokenisation alone can solve liquidity constraints in financial markets, particularly for traditionally illiquid assets.
DeFi lending has grown alongside institutional interest, with the sector expanding 72% year-on-year through September, driven in part by increased use of stablecoins and tokenised assets.