Introduction

As the DeFi ecosystem faces a series of issues due to Oracle data delays—such as perpetual contracts being targeted by flash loan attacks due to minute-level price feeds, and RWA assets struggling to scale due to the lack of off-chain verification—traditional architectures are stretched thin between security and efficiency. RedStone emerged in response to these challenges. It was born from the intersection of three key needs: the demand for sub-second data in high-frequency trading driving innovations in transmission models, EigenLayer’s restaking technology providing a new security paradigm for oracles, and modular design opening up the possibilities for multidimensional data verification. This article will explain the background of RedStone and how it addresses current challenges.

What is RedStone?

Source: https://x.com/redstone_defi

In the rapid growth of Web3 applications, real-time, reliable, and secure data has become the cornerstone for decentralized applications (dApps). As a leading oracle protocol in the industry, RedStone has built a trust network spanning over 100 dApps, securing billions of dollars in digital assets across DeFi, RWA, and other critical sectors. Its innovative modular architecture introduces three key advancements: dynamic data stream transmission, zero-knowledge proof verification layers, and a multi-chain native adaptation engine. These innovations provide developers with a customizable, cost-efficient data infrastructure. RedStone’s modular architecture seamlessly supports both EVM and non-EVM chains. These help it establish a unified data consensus layer across the ecosystem.

Source: https://blog.redstone.finance/2022/01/10/introducing-redstone/

Project Background

Team Members

RedStone’s team has experience working on projects such as Alice and Arweave, with deep technical expertise and product development experience:

• Jakub Wojciechowski | Founder & CEO
• Marcin Kaźmierczak | Co-founder & COO
• Mateusz Gurbiel | Business Development Lead
• Core members have contributed to building other well-known blockchain projects and have strong backgrounds in distributed systems and cryptography.

Funding History

RedStone has raised a total of $22.52 million, including:

• Pre-seed Round: $520,000
• Seed Round: $7 million led by Lemniscap, with participation from Coinbase Ventures and others.
• Series A Round: $15 million led by Arrington Capital, with participation from Kraken Ventures, White Star Capital, Spartan Group, Amber Group, SevenX Ventures, and IOSG Ventures.

Technical Architecture

Key Terminology:

RedStone reconstructs the data value chain with a modular approach. Its technical framework is tailor-made for DeFi and delivers end-to-end innovation from data capture to cross-chain invocation through a four-layer collaborative architecture:

The streaming data layer breaks the on-chain storage limits and builds real-time data streams with sub-second updates. The decentralized validation layer combines cryptography and game theory to transform trust production into verifiable mathematical processes. The on-chain adaptation layer allows smart contracts to acquire off-chain data at minimal costs by leveraging demand-driven data pulls and gas optimization techniques. The cross-chain expansion layer breaks the ecosystem silos and constructs a unified multi-chain data semantic layer.

This architecture solves traditional oracle delays, cost, and security issues and enhances security exponentially with EigenLayer restaking, making RedStone the first oracle infrastructure supporting high-frequency financial primitives. It is a key enabler for the transition of DeFi from “transaction automation” to “economic autonomy.”

Source: https://blog.redstone.finance/2025/02/12/introducing-red-tokenomics/

Data Streaming Layer

As RedStone’s data-sensing system, this layer is designed to solve the real-time connection between on-chain applications and real-world data. It compresses the minute-level data delay of traditional oracles to sub-second levels while defending against MEV attacks. The data streaming layer uses the following technologies:

• Multi-source Aggregation Engine: Integrates 200+ data sources, including real-time order books from CEX platforms like Gate, and on-chain liquidity pools from DEX platforms like Uniswap and Curve. The engine adjusts the credibility of data sources based on exchange trading volume and liquidity depth.
• Streaming Signature Protocol: Nodes continuously sign data streams (every 300 milliseconds) using Schnorr signature technology, and signed data packets are broadcast via a P2P network to avoid centralized bottlenecks.

Schnorr signature technology workflow diagram
Source: https://www.elecfans.com/blockchain/902729.html

• MEV Filter: Detect abnormal fluctuations (such as flash loan attacks) in real-time, and automatically freeze suspicious data streams. Threshold encryption delays the decryption of sensitive data to prevent front-running attacks.

A design solution for an MEV-resistant filter
Source: https://www.chaincatcher.com/article/2099908

Decentralized Validation Layer

This layer establishes a game-theory-driven trust production system that ensures the authenticity of data can be validated by on-chain contracts without relying on trust. RedStone’s validation mechanisms include:

• Hybrid Node Network: RedStone uses three types of nodes in this network.

Professional Nodes: Market makers like Wintermute operate high-availability signing nodes.

Community Nodes: Staking $RED (tokens not yet released) for validation, using a reputation-based elimination mechanism.

Supervisory Nodes: Academic institutions act as auditors, monitoring the behaviour of professional nodes.

• Dual Consensus Mechanism: Arweave storage proofs ensure historical traceability for data availability. For economic security, EigenLayer restaking and native $RED staking solutions provide dual protection for economic security.
• Dynamic Penalty System: RedStone uses a dynamic penalty system, ranging from partial staking deductions for false information to permanent blacklisting. It also encourages community nodes to monitor abnormal behavior.

On-Chain Adapter Layer

As the critical bridge connecting off-chain data flows with smart contracts, the on-chain adapter layer resolves traditional oracle challenges, such as high gas consumption and low flexibility. Its core mission is to seamlessly inject verified off-chain data into the smart contract execution environment while ensuring cost efficiency and developer-friendliness, thus effectively upgrading the data-as-a-service paradigm:

• Wide-Area Data Pack Technology: A single call can retrieve multidimensional data such as ETH price, volatility, and trading volume. Using CBOR encoding for compression, the data size is reduced by 60% compared to JSON.
• Gas Optimization Solutions: Unlike traditional oracles that push data periodically, RedStone pulls data only when the contract requires, saving over 70% of gas costs.

Cross-Chain Expansion Layer

To achieve the vision of “one verification, available across all chains,” this layer creates a unified multi-chain data semantic layer covering EVM, Cosmos, Solana, and other heterogeneous blockchain ecosystems. The solutions for different public chains are as follows:

• EVM Chains: Directly deploy Solidity contracts.
• Cosmos Chains: Integrates with custom modules through the IBC protocol.
• Solana: Achieve low-latency calls via the Neon EVM compatibility layer.
• Bitcoin Ecosystem: Bind data commitments through the RGB protocol.
• Move-based Chains (Aptos/Sui): Develop native Move language verification modules.

To enable cross-chain functionality, RedStone introduces Merkle Proof Tree technology. This cryptographic approach ensures multi-chain data consistency by verifying the authenticity of cross-chain data at a low cost. RedStone compresses large amounts of off-chain data into a single Merkle root hash, which is anchored to an authoritative chain (such as Ethereum). Other chains can then validate the data integrity by referencing the data entries and their corresponding hash paths. This method minimizes gas costs by avoiding full data transfers, while safeguarding against data tampering or malicious forks, thus providing a unified and trustworthy data source for multi-chain DeFi applications.

Source: https://docs.redstone.finance/docs/get-started/data-formatting-processing/

Technical Highlights

Modular Architecture Breaks Traditional Oracle Barriers

While traditional oracles couple data collection, verification, and transmission into an inseparable unit, RedStone deconstructs this paradigm through modular design. It enables developers to customize data streams like building with Lego blocks. This design solves three historical challenges:

• Data Source Plug-in: Supports custom aggregation logic (e.g., using only DEX data or filtering low-liquidity CEX data).
• Replaceable Validation Layer: Allows switching between zero-knowledge proofs and traditional signature schemes.
• Storage Layer Scalability: Default use of Arweave, with the option to integrate IPFS/Filecoin/Ceramic.

Source: https://docs.redstone.finance/docs/get-started/data-formatting-processing/

EigenLayer Restaking Reconstructs the Security Paradigm

Facing the critical oracle vulnerability where node malicious actions outweigh staking costs, RedStone creatively integrates Ethereum’s restaking mechanism. This increases attack costs by 300% compared to traditional models. RedStone, as the only large oracle that has never experienced a mispricing event, has now incorporated EigenLayer AVS to secure up to $14 billion in economic security when needed:

• Double Staking Defense: Nodes must stake $RED tokens and ETH (via EigenLayer).
• Penalty Leverage Effect: Malicious behaviour triggers dual slashing of ETH and $RED, with a theoretical single attack cost of over $320 million.
• Trust Transmission Network: Reuses the Ethereum validator network’s security, creating a cross-protocol security shield.

However, despite its innovative security upgrades, some risks remain:

• Time-Lock Delay Arbitrage: Although penalty instructions take 9 minutes to take effect, attackers can use platforms like Compound to loop borrow assets and offset 70% of staked asset value within 150 seconds.
• EigenLayer Single-Point Failure Propagation: If EigenLayer encounters a governance attack (e.g., through LST manipulation), RedStone’s AVS module may be forced to fork to provide a 21-56 hour security vacuum period.

Source: https://blog.redstone.finance/2025/01/31/introducing-redstone-avs-the-blockchain-oracle-secured-by-restaking/

Streaming Data Engine Activates High-Frequency DeFi Scenarios

To address the performance limitations of traditional oracles with minute-level updates, RedStone has developed a streaming transmission protocol tailored for high-frequency trading:

• Sub-Second Updates: Data delays are compressed to under 300ms via continuous signing.
• Pay-As-You-Go Model: Gas fees are only paid when data is used, which reduces costs by 70% compared to Chainlink.
• Anti-MEV Encapsulation: Threshold encryption delays decrypting sensitive data, eliminating arbitrage bot front-running opportunities.

Comparison with Traditional Oracles

The three major oracles, Chainlink, Pyth, and RedStone, overlap in certain areas, but each provider has unique specializations. In the long term, the blockchain and DeFi sectors will require multiple oracles that excel in different domains.

Chainlink

• Advantages:

Maturity: Chainlink has a large team and significant industry influence, with institutional partners such as SWIFT and ANZ Bank.

Security: Supports Proof of Reserves (PoR) products and features Smart Value Recovery (OEV) (available only for Ethereum).

Wide Usage: Operates on 18 blockchains and primarily uses the Push model.

VRF (Verifiable Random Function) Support: Chainlink’s VRF is widely used.

• Disadvantages:

Pricing Errors: Chainlink has encountered pricing inaccuracies in events like the Terra crash, resulting in $11.2M in losses, as well as the Lido wstETH price error. Additionally, its Proof of Reserves (PoR) feature has also experienced failures.

Limited Blockchain Support: Chainlink currently supports just 18 blockchains and has yet to integrate non-EVM chains fully. It also lacks native RaaS (Rollup-as-a-Service) and L2 ecosystem support, with limited innovation in DeFi, offering no support for Restaking or Tokenized Vaults.

Pyth

• Advantages:

Wide Blockchain Support: Supports over 70 blockchains and uses a Pull model, reducing on-chain gas costs.

Strong Data Sources: Data primarily comes from market makers, which is more accurate than simple aggregators.

RaaS & L2 Support: Supports OP and Arbitrum.

VRF Support: Pyth has its own VRF.

• Disadvantages:

Severe Pricing Errors: Pyth has experienced critical pricing discrepancies, including an 87% mispricing of BTC, Drift Protocol RBL mispricing, and the Mango Markets manipulation incident.

Lack of PoR and Bitcoin Liquid Staking PoR Support: Pyth has limited transparency in DeFi. While it excels with non-EVM chains, its support for the EVM ecosystem is relatively underdeveloped. In contrast to Chainlink, Pyth also lacks institutional backing from high-level banking partners.

RedStone

• Advantages:

Push + Pull Compatibility: Supports both Push and Pull models. They balance real-time data delivery and cost optimization.

Wide Blockchain Support: The Push model covers 38 chains, while the Pull model extends to over 70 chains, providing the broadest network coverage.

Innovative Features: Supports Proof of Reserves (PoR), including Bitcoin Liquid Staking PoR. It also supports RaaS and L2 ecosystems, with compatibility for OP and Arbitrum. Additionally, it integrates Restaking through EigenLayer and Symbiotic, and supports Tokenized Vaults via Veda, Nucleus, and Dinero.

Institutional Support: Partners include CoinFund, CoinDesk Indices CESR, and Soneium.

• Disadvantages:

Still Developing: The VRF is in the testnet phase, and the infrastructure is not as advanced as Chainlink’s.

Uncertain Valuation: Although the token is nearing launch, the Fully Diluted Valuation (FDV) remains undisclosed, and market acceptance is still untested.

Comparison Chart:

Source: https://blog.redstone.finance/2025/01/16/blockchain-oracles-comparison-chainlink-vs-pyth-vs-redstone-2025/

RedStone Tokenomics

Token Distribution

The maximum supply of $RED (yet to be launched) is 1 billion tokens, with an initial floating amount of 30%. $RED will be implemented as an ERC-20 token on the Ethereum mainnet and will be transferred via Wormhole’s native token transfer standard to Solana, Base, and other networks after the token generation event.

Nearly half of the $RED tokens (48.3%) will be allocated to the RedStone ecosystem and community, including the following categories: community and genesis, ecosystem and data providers, and protocol development.

Source: https://blog.redstone.finance/2025/02/12/introducing-red-tokenomics/

Token Features

Sustainable tokenomics is crucial for oracles to survive and ensure DeFi’s long-term security. $RED is designed as a utility token with an innovative value accumulation mechanism, introducing the first truly sustainable oracle economy. By leveraging RedStone’s EigenLayer Active Verification Service (AVS), $RED staking adds a powerful layer of economic security to RedStone’s Oracle stack. It utilizes staked $RED and potentially billions of dollars staked within EigenLayer to provide additional security.

• Data providers (who supply data to RedStone’s modular oracle network) can stake $RED, while token holders can enhance network security by directly staking RedStone AVS.
• $RED stakers will receive rewards from RedStone data users across hundreds of blockchains, with rewards paid in widely adopted assets such as ETH, BTC, SOL, and USDC.

Source: https://blog.redstone.finance/2025/02/12/introducing-red-tokenomics/

Future Outlook

RedStone’s long-term value doesn’t stem from a single technological breakthrough but rather from its strategic role as a “connector” within a modular stack. By disassembling the data production, verification, and transmission processes of oracles, it offers composable solutions tailored to the unique needs of various blockchains. This approach allows RedStone to sidestep direct competition with established players and set new standards in emerging application scenarios.

Modular Design Will Reshape Oracle Industry Cost Structure

RedStone’s flexible architecture breaks through the economic model constraints of traditional oracles. While protocols like Chainlink are still limited by the fixed costs of continuous updates on-chain, RedStone’s “sign-store-on-demand call” layered model reduces the marginal cost of data supply to near zero. This model caters to the DeFi derivative market with high-frequency trading as well as offers feasible pricing solutions for RWA, game assets, and other long-tail assets. If RedStone can maintain its compatibility advantage with DA layers like Celestia and Avail, it could propel oracles from infrastructure to the data service market paradigm shift.

Ecosystem-Oriented Expansion Determines Market Ceiling

Currently, RedStone has formed a scale effect in DeFi, but the real growth potential lies in vertical scene breakthroughs. Once its customized compliance pipeline for the RWA sector is up and running, it could tap into traditional financial institutions’ on-chain data needs. Meanwhile, its standardization attempts for DePIN device data could open new scenarios in IoT + blockchain convergence. The strategic risk here lies in resource diversification—balancing maintaining decentralization principles and meeting enterprise-level customization requirements is far more complex than simply catering to native crypto protocols.

Decentralization Process Faces Dual Challenges in Tokenomics and Governance

The level of decentralization in RedStone’s node network will directly affect the protocol’s credibility. The current staking mechanism lacks appeal for smaller nodes, which could lead to the concentration of signing rights among major service providers. If the reputation scoring system scheduled for launch in 2024 doesn’t significantly enhance node diversity, RedStone may face the paradox of a “modular architecture with centralized operation.” A more fundamental challenge lies in governance—when responding quickly to enterprise client demands, the community voting mechanism could become a bottleneck, which tests the compatibility of crypto protocols with traditional business practices.

Conclusion

RedStone is a modular oracle that has experienced a 500% user growth rate in 2024. It is the go-to oracle for over 1,000 blockchains, 10,000+ assets, and traditional financial institutions, connecting trillions of dollars to the blockchain. With billions in funding, RedStone is dedicated to providing all the tools and resources builders need to unlock DeFi‘s true potential.