Institutional tokenization firm Securitize has tapped RedStone as its primary data provider for its current and future products issued by the likes of Apollo, BlackRock, Hamilton Lane and KKR.
Oracles deliver price feeds and other data for smart contract-based systems that rely on offchain information.
The move represents a serious step forward for the “real-world asset” sector. Billions of dollars have been invested in RWAs based largely on the idea that tokenized financial products — representing anything from individual equities to onchain hedge funds — will have more utility. However, much of the infrastructure needed to support this is still being built out.
"Before, Securitize did not use oracles as tokenized funds like BlackRock BUIDL were not used in DeFi," RedStone Chief Operating Officer Marcin Kazmierczak told The Block in a message. "It was simply a tokenized representation of the fund onchain with no functionality."
The RedStone integration, in other words, is making it easier to bring onchain finance … onchain. Kazmierczak noted in particular that oracle feeds will provide an avenue to plug Securitize-issued funds into DeFi protocols like Compound, Morpho and Spark.
In particular, RedStone will be the eyes and ears for the Apollo Diversified Credit Securitize Fund (ACRED), BlackRock USD Institutional Digital Liquidity Fund (BUIDL) and Hamilton Lane’s Senior Credit Opportunities Fund (SCOPE), among other institutional offerings.
A Securitize spokesperson noted that the company's sToken functionality launched in November already gave these products a degree of composability. BUIDL, for instance, had been "integrated into DeFi, with Elixir as an example," he said. Built using Ethereum's ERC-4626 token standard for vaults, sTokens provide a way for accredited investors to earn yield on assets like BUIDL and SCOPE while maintaining liquidity through Elixir's deUSD synthetic dollar.
However, introducing an oracle "will significantly expand the potential use cases of these assets, including applications in money market exchange venues or as collateral in decentralized finance (DeFi) platforms."
Kazmierczak noted Securitze ran a "diligent, months' long research on oracles" before picking RedStone as its first oracle provider. The system uses a "modular design" that "can scale to thousands of chains and support new implementations in a matter of days in a safe manner." The tool currently supports applications on Ethereum and EVM-compatible chains like Avalanche and Polygon as well as TON, Sui and Fuel.
"RedStone was designed with modular architecture that is omnichain by default, as opposed to the monolithic approach of first-generation oracles, which were designed when only Ethereum was a chain with active smart contracts utilization," Securitize told The Block in an interview. "It's simple and cost-efficient for RedStone to add new price delivery modules to support any blockchain. For competitors, crosschain support requires integrating interoperability solutions, adding additional potential points of failure, or even entire network redeployments, which need to be synced with each other."
RedStone features other advantages, including the use of Arweave for permanent data storage. The oracle system has also yet to face downtime or a mispricing event.
Arrington Capital led RedStone’s $15 million Series A funding in July 2024. The protocol launched its RED token last week.
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