Although the crypto market has been dominated by Meme, Meme and Meme in the past few months, compared to the end of 2024, the hype around Meme has turned into an extremely "distorted" corner, from Trump's token launch to the recent "Libra scandal", the Meme sentiment in the market has also declined accordingly, please see the chart below:
In terms of data, since the launch of the LIBRA token, the daily trading volume of pump.fun (including the purchase and trading of newly issued tokens) has decreased by 33.7% from $184 million to $122 million. In addition to trading volume, pump.fun has also stagnated in other areas. On Tuesday, the platform only registered 59,000 new wallets, the lowest point since November 17, 2024. Compared to the day of the inauguration of President Trump last month, the platform had about 110,000 active wallets. Compared to the current "distorted Meme" stage, I really miss the AI Agent Meme period a few months ago, but PvP is not the end of the blockchain, practicality and innovation are the eternal topics of the industry.
Recently, one of the projects I am more optimistic about in terms of the combination of practicality and innovation is the oracle project RedStone, which completed a $15 million Series A financing in July 2024, and released its token economics a week ago. DeFi KOL Poopman wrote about RedStone yesterday, analyzing the advantages and potential of RedStone from several aspects such as its modular advantages, market share and token economics, which Odaily has compiled as follows:
TL;DR
-RedStone's modular architecture, AVS scalability, strong security and ultra-low latency make it one of the most trusted and fastest oracles in the ecosystem.
-In 2024, with $3.8 billion in TVS and over 100 partners, RedStone has become the second largest oracle provider in the field.
-During the $2 billion deleveraging and Renzo (ezETH) decoupling in 2024, RedStone's price updates were faster, lower latency, more stable and accurate compared to other oracles.
-Its token RED is a yield-bearing utility token that captures value from data and price feedback services. To improve capital efficiency, RED can be wrapped as LRT and deployed across various DeFi protocols to earn additional yield.
-Benchmarked against Pyth's $2 billion FDV, the expected USD trading price of RED is around $2. The token economics is more focused on community growth, with 70% of the tokens locked in the first 12 months.
The current market cycle has deviated from the fundamentals for some time now, and we all know that this is unhealthy for the long-term development of the industry. Many of the tokens we are familiar with today are just bubbles or Memes, while innovative protocols with real demand and large-scale adoption are still in the neglected stage.
Recently, RedStone Oracle announced that their token RED will soon have a TGE. Their token economics aims to provide more value to users or token holders.
In this article, the author will analyze the advantages and potential of RedStone from 5 aspects:
-RedStone's features
-RedStone's market adoption
-Differences compared to other oracles
-RED token economics
-Potential valuation of RED
Why is RedStone better?
As we all know, oracles are one of the most important components of the blockchain, without oracles, the blockchain is just a closed ecosystem, unable to access data from external sources. In today's market, every chain and dApp needs an economically efficient, secure and flexible oracle.
And I believe RedStone has successfully filled this gap.
In recent years, RedStone has integrated and provided price oracles for hundreds of mainstream (Tier 1) protocols from day one, including USDe, Pendle, Morph Blue, Berachain, EtherFi and Lombard BTC. But what makes RedStone the favorite of so many projects?
The reason is simple: security and modularity.
Security under AVS
Unlike other oracles, RedStone can verify the accuracy and validity of price feedback data using the EigenLayer AVS framework, achieving more efficient Gas spending and scalability.
Odaily note: AVS stands for Actively Validated Service, which is the most important concept in the Eigenlayer ecosystem. AVS is simply a protocol, service or system that requires staking to validate "tasks". The AVS service itself undertakes the work of obtaining prices and reporting prices, and the AVS also corresponds to its service management contract - Service Manager, which communicates with the Eigenlayer contract and contains the state related to the service functionality, such as the operator running the service and the amount of deposit used to protect the service.
The traditional oracle price push model works by collecting data from various sources and verifying it through DDL (Data Definition Language) and data consumption modules. Due to the on-chain verification process, this requires a large amount of Gas fees, making it quite expensive. With RedStone's AVS, RedStone can provide highly optimized verification Gas by processing data off-chain.
The process is as follows: AVS operators obtain market prices and TWAP rates through the data source module, verify their accuracy, and then feed the verification results back on-chain.
Since most of the computational work is performed off-chain, while maintaining trustworthiness and verification through AVS, RedStone provides a more cost-effective oracle solution compared to other solutions in the field.
Modularity
In addition to scalability, modularity is another major advantage of RedStone. The platform's modules provide both pull and push modes. This gives projects better flexibility, allowing them to choose managed or raw oracle data sources based on their specific needs. Projects can choose price feeds that have been carefully filtered and verified, or customizable raw data streams to protect their assets.
Odaily note: The pull model and push model are specifically as follows:
Due to its modular architecture, RedStone infra allows different system components to be swapped out seamlessly without affecting system performance or reliability. The plug-and-play modularity makes RedStone one of the most universal oracle solutions in today's DeFi innovation and emerging chain systems.
Market Metrics
Client Growth
RedStone's modular, plug-and-play architecture has driven user growth for its projects, making it one of the fastest growing oracle solutions in the blockchain space.
Throughout 2024, RedStone significantly expanded its reach, establishing partnerships with over 100 new clients and launching on over 30 chains. RedStone has over $6.8 billion in TVS, making it the second largest multi-chain oracle provider, while Chainlink is primarily focused on the ETH ecosystem.
The platform's reputation for reliability continues to attract mainstream DeFi participants. Notable partners include securing $3 billion in TVS for Spark (Maker's lending protocol), as well as providing price feeds for DeFi leaders like Pendle, Ethena, and various BTC staking, yield stablecoins, LST and LRT, reflecting the industry's confidence in RedStone's reliable and customizable oracle solutions.
Price Feedback Latency (Low Latency)
RedStone is one of the fastest and most reliable oracles in the field, while maintaining decentralization, which is considered a trilemma. In terms of speed, RedStone's update speed exceeds most centralized oracles (only Binance's speed is slightly faster than Redstone). RedStone's ability to compete with CEXs in terms of speed while maintaining decentralization is quite impressive.
Stability
RedStone has also shown reliability in market volatility, maintaining consistent and accurate price feedback at critical moments. In the $2 billion liquidation event in February 2024, Redstone successfully pushed 119,000 updates within 24 hours, with the number of updates for the ETH/USDC price exceeding Chainlink by 30 points, providing more timely and accurate pricing.
It has been proven that during the Renzo (ezETH) de-peg event in April 2024, RedStone was able to keep up with price changes better than Chainlink. During this period, RedStone issued approximately 40 price updates within 3 blocks, while Chainlink only pushed about 20 updates during the same time. This indicates that RedStone is actually faster than the market-leading oracle provider. For more details, please refer to the Chaos Labs report.
Comparative Advantages: Each oracle project has its own strengths, but RedStone integrates all the features together.
Differences between RedStone and Other Oracles
The following is an introduction to the mainstream oracle projects in the current market:
Chainlink: Mainly for EVM, OG DeFi, primarily using the push model, providing reliable data through bridging using CCIP and expensive integration setups, supporting only a few blockchains;
Pyth: Mainly for non-EVM, Perps markets, primarily using the pull model, using Wormhole as a cross-chain relay, focusing on data push quality;
RedStone: Any chain, any market, providing both push model and pull model, using eigenlayer AVS for cost-effective on-chain verification, with proof of reserves for wrapped BTC assets.
The following image compares the differences between the three major oracle providers in the market:
Upcoming TGE, RED Token Economics
As RedStone expands to thousands of on-chain protocols, the RED token will play a crucial role in decentralized oracle and capturing value from all integrated projects. RedStone's data providers (operators) have complete flexibility, as they can set any collateral, charge any fees (in any token), or establish any requirements they want.
RED will serve as a utility token, where holders can stake and delegate it to data providers to earn a share of fees and rewards.
Additionally, RED will also allow for a restaked version, enabling its LRT to be used in any DeFi protocol to unlock additional economic value (similar to stETH).
Official data shows that the total supply of RED tokens is 1 billion. Of this, the initial circulating supply is 30%, and RED will be issued as an ERC-20 token, but can later be bridged to Solana, Base, and all other supported networks using the Wormhole native transfer standard.
The design of RED is community-centric: the majority of the token supply (48.3%) will be allocated to community growth initiatives, including airdrops, future grant programs, and incentives, while 20% will be allocated to core contributors;
To ensure the long-term sustainability of RED, 70% of the RED tokens will be fully locked for 12 months after the TGE, and then gradually unlocked over the following 36 months.
As RedStone's customer base grows, operators will earn more fees, which will also increase the rewards for RED token holders. Higher yields will lead to higher token staking rates, ultimately forming a positive feedback loop.
RED Token Valuation
The FDV of leading oracle projects in the market has reached billions of dollars. As a leading oracle protocol, comparing RedStone with Chainlink and Pyth can better estimate the price of the RED token:
With a total supply of 1 billion tokens, an initial price of $1 would give RedStone an FDV of $1 billion, but considering the project's current market positioning, $1 seems a bit conservative.
A better valuation method is to compare it with Pyth's $2 billion FDV, and considering the 30% initial circulating supply, the price per token would be $2, which is also my expected price for the RED token.
If the market sentiment improves, RED may reach Chainlink's FDV, and the token price could rise to $20 per token.
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