RedStone adopts a differentiated modular design to meet the needs of DeFi protocols, allowing data providers to avoid constantly delivering on-chain data.

Byline: 1912212.eth, Foresight News

In the last cycle, oracle, driven by DeFi and the important position of middleware, has been highly sought after. Now, Chainlink firmly occupies the leading position in the market, while Pyth is expanding vigorously in DeFi protocols with the support of the Solana ecosystem. Various modular design protocols are sweeping through the public chain, re-staking, and other tracks. So, where does the modular design of the oracle track stand?

Today, we are going to introduce the modular oracle protocol RedStone. In early July, RedStone completed a $15 million Series A financing round, led by Arrington Capital, with participation from Kraken Ventures, White Star Capital, Spartan Group, Amber Group, SevenX Ventures, IOSG Ventures, as well as angel investors such as Smokey the Bera and Homme Bera from Berachain, Mike Silagadze, Jozef Vogel, and Rok Kopp from Ether.Fi, and Amir Forouzani, Jason Vranek, and Christina Chen from Puffer Finance.

What is RedStone

RedStone is a modular oracle network that provides data sources for DApps and smart contracts on L1, L2, and Rollup-as-a-Service networks (such as EigenLayer), especially for collateral in the lending market, such as LST and LRT.

The current oracle networks are not perfect, and there is still room for improvement in the accuracy and completeness of data sources. In addition, as the data for newly listed assets increases rapidly, some oracles often appear slow to react or even do not support new assets.

RedStone, on the other hand, adopts a differentiated modular design to meet the needs of DeFi protocols, allowing data providers to avoid continuously delivering on-chain data and allowing end users to deliver signed oracle data on-chain. RedStone also uses Arweave to archive and maintain oracle data.

According to official data, since its mainnet launch in January 2023, RedStone has supported over 20 chains and integrated over 50 data sources with more than 1,000 types of asset sources, including not only cryptocurrencies but also stocks, fiat currencies, commodities, and ETFs.

How does RedStone operate

Currently, most oracle solutions in the market use a third-party push model. The well-known oracle protocol Chainlink uses the Pull model, while Pyth uses the Push model, both aiming to address the trust and cost issues of oracles.

Specifically, Chainlink's primary price oracle nodes obtain data from secondary sources. Oracles pull price updates to individual chains at set intervals, incurring gas fees for each on-chain update. Adding price sources or reducing on-chain update latency will increase costs for the oracle network, hindering its scalability. In Pyth's Push model, data is provided directly by entities within the network, such as exchanges, market makers, and DeFi protocols (such as Jane Street, Binance, and Raydium). These entities are incentivized to act honestly and provide robust data to maintain a good reputation and avoid being banned by protocols.

RedStone adopts a modular design and uses three different models to deliver data according to its business needs and the architecture between chains, thereby maximizing the advantages of each model and avoiding their shortcomings.

• Pull model: dynamically load data into user transactions to save gas and optimize user experience, suitable for individual transactions;
• Push model: transmit data through relays for on-chain storage, mainly suitable for past oracle protocol;
• X model: focus on the needs of perpetual contracts, options, and derivative protocols by eliminating front-running risks.

A typical operational process involves collecting data from sources such as exchanges (Binance, Coinbase, Kraken, etc.), on-chain DEXs (Uniswap, Balancer, etc.), and market data aggregation websites (CoinMarketCap, CoinGecko).

The data is aggregated by independent nodes operated by data providers and secured with various measures such as median, time-weighted average price (TWAP), linearly weighted average price (LWAP), and outlier detection to ensure data quality.

These data streams are broadcast directly to open-source gateways that can be easily separated on demand. Data can be pushed to the chain under predefined conditions through dedicated relays, or pushed by robots (e.g., for liquidation) or end users interacting with the protocol.

RedStone first places this data in the DA layer and then extracts it to the chain. This allows a large amount of assets to be broadcast to cheaper levels at high frequencies and only placed on the chain when needed by the protocol.

RedStone has not yet launched a token, but its official documentation has listed the token's functions, including paying for data access fees, locking tokens into the ecosystem to ensure that wrongdoers are punished, voting to resolve disputes, and developing early markets. The official statement also indicates that token grants and subsidies will be allocated to early adopters of data and data providers.

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