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RedStone Launches Settlement Layer For DeFi Lending, Aims to Use Tokenised RWAs

RedStone Launches Settlement Layer For DeFi Lending, Aims to Use Tokenised RWAs

New layer targets the mismatch between RWAs and DeFi liquidation models.

Written by Rahul Dhingra, Edited by David Delima | Updated: 29 April 2026 15:08 IST

RedStone Launches Settlement Layer For DeFi Lending, Aims to Use Tokenised RWAs

Photo Credit: Unsplash/Shubham Dhage

The system allows lending protocols to handle slow-settling assets

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Highlights

On-chain auctions triggered during liquidation events
Targets RWAs with long redemption cycles in DeFi
Aims to unlock billions in idle tokenised assets

A decentralised oracle provider, RedStone, has announced the launch of a new settlement layer for decentralised finance (DeFi). The core goal of this launch is to make tokenised real-world assets (RWAs) available as collateral in lending protocols. This new system is called RedStone Settle, and it is designed to address the structural issue in DeFi, a problem that the industry has battled for a long time. Aave and other lending platforms depend on quick liquidations to keep their risks in check. On the other hand, RWAs, like tokenised funds and bonds, usually have redemption periods of 60 to 180 days. This mismatch has made it hard for RWAs to be used as collateral.

On-Chain Auction Mechanism to Manage Delayed Redemption Risks

As per RedStone, the new layer will introduce an on-chain auction mechanism that is triggered during liquidation. Liquidity providers can step in and buy positions right away, giving protocols liquidity while taking on the risk of redemption being delayed that comes with the underlying assets. The Switzerland-based company further added that this approach could help unlock more than $30 billion (roughly Rs. 2,84,460 crore) in tokenised RWAs, which are currently sitting idle in DeFi, while making it easier for users to borrow against yield-generating positions.

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“Tokenisation brought real-world assets on-chain, but it stopped short of making them usable inside financial systems that depend on speed and certainty,” said RedStone CEO Marcin Kaźmierczak in a statement to Cryptobriefing He further added that, “RedStone Settle closes that gap. It allows RWAs to function as collateral in the same way assets do in traditional secured lending, without forcing protocols to take on redemption risk they can't manage.”

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Earlier this month, the International Monetary Fund (IMF) had said that tokenisation can make processes such as settlement and ownership transfer easier, lowering costs and making things clearer. However, it also warned that the rapid adoption of tokenised systems could pose challenges related to financial stability, governance, and regulatory oversight across global markets. The findings highlight the growing need for policymakers to adapt to advancing financial technologies.

The launch highlights how DeFi platforms are exploring ways to integrate tokenised real-world assets into existing lending systems while addressing structural challenges that have existed for a long time. Going forward, the effectiveness of such models will depend on adoption by protocols and how they align with broader regulatory and market developments.

Cryptocurrency is an unregulated digital currency, not a legal tender and subject to market risks. The information provided in the article is not intended to be and does not constitute financial advice, trading advice or any other advice or recommendation of any sort offered or endorsed by NDTV. NDTV shall not be responsible for any loss arising from any investment based on any perceived recommendation, forecast or any other information contained in the article.

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Further reading: Cryptocurrency, DeFi, RWA, Tokenisation

Rahul Dhingra

Email Rahul Dhingra

Rahul Dhingra is a crypto writer at Gadgets 360, where he covers the exciting world of Cryptocurrency, Blockchain, Defi and Web3. Before joining Gadgets 360, he worked as a content specialist for a European-based Crypto Exchange. Rahul loves storytelling, not just through the written word but also through the visual medium. Beyond his professional life, Rahul is a sports fanatic. Whether it’s cricket or football, his passion for the game is contagious. More