Key Summary
Modular architecture, lower cost: RedStone separates data collection and on-chain delivery, stores large amounts of data in Arweave, and provides the latest data on demand, greatly reducing costs and delays.
Extremely fast updates and multi-chain compatibility: RedStone provides sub-second (about 300 milliseconds) price data, supports more than 70 blockchains and more than 130 projects, and rapidly expands the Web3 ecosystem.
Challenge Chainlink and Pyth: Different from Chainlinks push mode, RedStone adopts a pull mechanism, which can save up to 70% of gas fees and is more suitable for multi-chain scenarios than Pyth.
RED token and EigenLayer staking mechanism: RED tokens use a staking and penalty mechanism to ensure network security, and combine with EigenLayer staking to enhance security and attract institutional users.
Expand DeFi and real-world asset applications: RedStone plans to enter high-frequency trading, asset tokenization, and traditional financial integration, and gradually shift to DAO governance to ensure long-term decentralized development.
In May 2022, an oracle failure caused a popular DeFi platform to lose millions of dollars, which once again proved the importance of reliable data for decentralized finance. Today, RedStone is entering the market as a new generation of oracle service provider, redefining the acquisition, transmission and security of on-chain data. With modular architecture, Arweave storage technology and on-demand data push mechanism, RedStone ( RED/USDT ) can not only effectively reduce costs and delays, but also seamlessly expand to multiple blockchains. Next, we will deeply analyze this innovative oracle network and how it will shape the future of Web3.
Table of contents
Problems with Traditional Oracles
Why does Web3 need oracles?
Risks and limitations of existing oracle models
RedStones modular architecture
Decoupling of data collection and transmission
How Arweave achieves efficient storage
Actual case: How to help DeFi protocols reduce costs
Who can benefit from RedStone?
DeFi Protocol: Lending, Derivatives, and Yield Aggregation
NFT and Games: Dynamic Properties, Fair Game Mechanisms
Supply Chain and Insurance: Real Asset Tracking
RedStones Ecosystem and Growth
Supports 70+ blockchains and integrates 130+ projects
Key partners: DeFi, traditional finance, institutional support
Venture Capital and Binance Launchpad Listing
Staking, penalty mechanisms and network security
Fee Distribution and Participant Incentives
Market performance and future applications
How to ensure security and long-term development?
Core team and background introduction
Community participation and developer ecosystem
Governance Model: Towards a Decentralized DAO
Problems with Traditional Oracles
Why are oracles important to Web3?
In decentralized finance (DeFi) and the broader Web3 ecosystem, smart contracts must rely on external data to operate. This data may include crypto asset prices, weather forecasts, and even sports results. However, since the blockchain itself is a closed system and cannot directly obtain external information, an oracle is needed as a bridge to bring off-chain data to the chain.
If the data provided by the oracle is wrong or delayed, it may lead to serious financial losses. In the past, some well-known DeFi platforms have lost millions of dollars due to oracle failures, highlighting the importance of data accuracy and timeliness in the blockchain world.
Image Credit: Capital.com
Why is RedStone an industry innovator?
RedStone adopts a new modular architecture, which completely changes the way traditional oracles work. Unlike traditional methods, RedStone separates data collection and on-chain delivery to optimize costs and efficiency:
Oracles store massive amounts of data on decentralized permanent storage networks such as Arweave, ensuring data security and low storage costs.
Only when a smart contract actually needs a data point will the data be pushed to the chain on demand, thereby reducing the on-chain burden and saving gas fees.
This architecture not only significantly reduces costs, but also speeds up data updates and allows developers to integrate external data more flexibly.
Image Credit: RedStone
RedStones modular architecture
Decoupling of data collection and transmission
Traditional oracles usually combine data collection (off-chain) and data publishing (on-chain) in the same system, which is not only costly but also limits scalability. RedStone uses a modular design to split these two parts, greatly improving efficiency and reducing costs:
Off-Chain Providers: Independent nodes collect information from different data sources (centralized exchanges CEX, decentralized exchanges DEX, data aggregators, institutional-level data sources, etc.).
Data Validation and Signing: Data providers use anomaly detection, cross-source comparison and other methods to verify and use cryptographic signatures to ensure the integrity and credibility of the data.
Arweave Storage: Signed data is stored on Arweave, ensuring that the data is permanently available and cannot be tampered with, while the cost is much lower than Ethereum.
On-Chain Data Delivery: Pull Model: DApp will only obtain the latest data from Arweave when executing transactions and embed it into transactions, reducing unnecessary on-chain writes and greatly saving Gas fees; Push Model: Data is updated to the chain regularly through the Relayer, which is suitable for application scenarios that require real-time data.
Image Credit: RedStone
Why Arweave?
Arweave is a decentralized network focused on permanent storage, where users only need to pay a one-time fee to ensure that data is permanently available. This is crucial for oracles like RedStone that process massive amounts of real-time data per second.
For example, storing 1 GB of data on Ethereum may cost millions of dollars, but on Arweave it only costs tens of dollars, greatly reducing the cost of data storage.
Image Credit: Arweave
Actual Cases
Lending protocol on Binance Smart Chain (BSC): Lending protocols usually only need to query the latest price data when user transactions occur, and do not need to be frequently written to the chain. Using RedStones pull model, the protocol can embed the latest price data directly in the users transaction process without relying on traditional oracles to continuously push and pay high gas fees. This approach reduces the operating costs of lending protocols, updates data faster, and improves user experience.
Who can benefit from RedStone’s oracle solution?
DeFi Protocols
Lending Borrowing: Real-time price data can accurately estimate the value of collateral assets. Projects such as Venus (BSC) and Pendle have integrated RedStone to improve security and market responsiveness with sub-second (~300 millisecond) price updates.
Derivatives High-Frequency Trading: RedStone provides low-latency (~300 milliseconds) price data, supports perpetual contracts, options trading and quantitative trading strategies, helping traders optimize profitability.
Yield Aggregation: Many DeFi protocols provide innovative investment opportunities through asset tokenization or yield splitting. These mechanisms are highly dependent on RedStone’s accurate valuation to ensure fair pricing of yield assets.
NFT Gaming
NFTs with Dynamic Attributes: Minted artworks or collectibles can be dynamically updated through external data obtained by RedStone. For example, NFTs can change appearance or scarcity based on real-time sports results or weather conditions.
Game Mechanics: Role-playing (RPG) or fantasy sports games require reliable external data to ensure fairness. RedStone will also launch VRF (verifiable random function) in the future to provide true randomness for the game and ensure a fair and transparent competition environment.
Image Credit: Pixelplex
Supply Chain Insurance
Decentralized Insurance: For example, weather data or flight delay information can directly trigger smart contracts to automatically execute compensation, improving the transparency and operational efficiency of the insurance industry.
Internet of Things (IoT) and Real-World Assets: On-chain smart contracts can be updated in real time through sensor data, supporting more complex asset tracking and tokenization applications. For example, in the logistics supply chain scenario, RedStone synchronizes the freight status to the blockchain in real time, improving trust and efficiency.
RedStones expansion
Rapid expansion and ecological growth
Since the mainnet launch in January 2023, RedStone has expanded to more than 70 blockchains, integrated 130+ projects, and protected billions of dollars in on-chain assets.
The RedStone teams efficient execution capabilities enable it to quickly deploy to new blockchains within 1-2 weeks. Compared with other oracle service providers, RedStones expansion speed is significantly faster, which is one of the reasons for its rapid rise.
Image Credit: RedStone
Key partners and financing support
DeFi Integrations: RedStone has established cooperation with many well-known DeFi projects such as Lido, EtherFi, Pendle, Venus, etc., further consolidating its influence in the field of decentralized finance.
Traditional Financial Collaborations (TradFi Collaborations): RedStone becomes the exclusive oracle provider for the CoinDesk Index, achieving seamless integration of compliant financial data and the DeFi ecosystem, and is expected to promote the implementation of more institutional-level applications.
Investor Support: RedStone has received approximately $40 million in venture capital from investment institutions such as Coinbase Ventures and CoinFund, which has accelerated product development and market expansion. In addition, RedStone will be listed on Binance Launchpad at the end of 2024, greatly increasing its market visibility and liquidity.
When will RedStone surpass its competitors?
Chainlink: Still the oracle with the highest market share, with advantages such as push data model, large-scale data coverage, and enterprise-level cooperation. However, RedStones on-demand data model can reduce costs by up to 70% and provide faster update speeds, making it more competitive in terms of efficiency and cost control.
Pyth Network: It excels in sub-second data updates (especially the Solana ecosystem), but lacks the multi-chain compatibility of RedStone and is less competitive in cross-chain applications.
Band API 3: Focuses on First-Party Data or data aggregation mode, but there is still a gap compared with RedStones ultra-fast data update and flexible storage solutions.
Image Credit: CryptoKid
RED Token: The Core that Powers the RedStone Network
Staking Mechanism and Network Security
The RED token ( RED/USDT ) is the core of the RedStone economic model and will be officially launched in March 2025. Data providers must stake RED (and re-stake ETH through EigenLayer) to join the network.
If a data provider submits wrong or inaccurate data, the system will trigger a penalty mechanism (Slashing) to deduct part or all of its pledged funds. This mechanism ensures the credibility of all data providers and maintains the security and stability of the network.
Image Credit: RedStone Staking
Reward and Fee Distribution
Users: Protocol users need to pay fees to obtain data. Payment methods include ETH, BTC, stablecoins (USDT, USDC) and other assets.
Stakers: Part of the transaction fees will be distributed to the stakers of RED tokens as an incentive to maintain network security.
Token Supply: The total supply of RED tokens is 1 billion, of which 28% will be released at the time of issuance, and about 50% will be used for community growth and ecological incentives to promote long-term development.
Price and market performance
In early 2025, the RED token was officially launched on Binance Launchpool with an initial price of approximately $0.86.
The market capitalization and price of RED tokens fluctuate with the overall crypto market, but its strong fundamentals (multi-chain applications + high transaction volume) may become the core driver of long-term demand.
Image Credit: RedStone X (Twitter)
How does RedStone ensure security and long-term growth?
Leadership Team
RedStone was co-founded by Marcin Kaźmierczak (CEO) and Jakub Wojciechowski, and originated from Marcins in-depth research on blockchain oracles in 2017.
As of 2024, the RedStone core team has less than 30 people, but has successfully established a mainnet-level oracle and expanded to dozens of blockchains, demonstrating strong execution capabilities and market adaptability.
Image Credit: RedStone
Community Engagement
RedStone emphasizes deep interaction between developers and users, and establishes close community connections through Discord, Twitter (X) and official documents. In addition, the team regularly publishes technical blogs to introduce new features (such as Active Validation Service, Push-Pull data model), and actively solicits community feedback to ensure continuous product optimization.
Image Credit: RedStone X (Twitter)
Towards decentralized governance
RedStone Distributed Data Association: Responsible for token issuance and major decision-making, with the goal of gradually evolving into a DAO (decentralized autonomous organization) to enhance the transparency and fairness of network governance.
Future On-Chain Governance: RED token holders will be able to propose governance proposals, approve data providers, and decide the long-term development direction of RedStone, ensuring that the entire network gradually achieves decentralized autonomy.
Challenges and risks
Market competition and network effects
Chainlink remains the industry leader, and many top DeFi protocols use its data feeding services by default, with a very high market share.
Other oracle competitors (such as Pyth, Band, and API 3) have their own advantages in different market segments. RedStone needs to continuously optimize its technology and business model to maintain its competitiveness.
The degree of decentralization of data providers
If most nodes are controlled by a few large stakers, it may lead to the concentration of computing power, which is not conducive to the decentralized development of RedStone.
RedStone plans to launch a node reputation system to encourage more independent participants to join in order to improve the decentralization and fairness of the network.
Feasibility of economic model
Staking rewards rely on fees paid by data users. If DeFi ecosystem activities decrease, the returns from staking RED tokens may decline, affecting long-term sustainability.
Providing stakers with a variety of assets as rewards may reduce the direct demand for RED tokens, but it can also prevent RED tokens from losing value due to high inflation.
Technical and security risks
Any oracle may become a target of DeFi vulnerabilities. RedStone needs to continuously optimize security defense mechanisms to reduce the possibility of hacker attacks.
Relying on Arweave and EigenLayer, if these infrastructures fail or are attacked, it may have a chain reaction on RedStone.
Governance and community challenges
Decentralized governance may lead to reduced decision-making efficiency, which may conflict with the needs of some corporate users who want to quickly adjust data strategies.
If community proposals are inconsistent with the interests of large coin holders, it may lead to governance disputes, so an effective governance mechanism is needed to balance the needs of all parties.
Regulatory compliance risks
Providing traditional financial data may involve data authorization, privacy protection and legal compliance issues. RedStone needs to ensure compliance with regulatory requirements in different global markets.
Changes in the regulatory environment may affect RedStones business in certain regions, especially compliance requirements for cross-border data transfers, which may become one of the operational challenges.
Future Outlook
The development direction of RedStone is highly consistent with the overall trend of Web3, especially in the expansion of modular blockchain and multi-chain ecology, the role of oracles will become increasingly critical. With the continuous emergence of specialized L1 (Layer 1) and L2 (Layer 2) blockchains, these chains have a great demand for fast and low-cost data updates, which is the core competitiveness of RedStone.
Key growth drivers
High-Frequency DeFi: Many DeFi protocols require sub-second price data or advanced data support (such as derivatives markets, AMM (automated market maker) mechanisms). RedStone can provide near real-time data solutions to help these protocols improve market efficiency.
EigenLayer Restaking: By connecting to the Ethereum Validator network, RedStone enhances network security, which is an attractive option for decentralized applications (dApps) that need to process large-scale transactions.
Real-World Assets: RedStone plans to further integrate traditional financial data (such as mortgage rates, stocks, and commodity markets) to open up a broader market for the DeFi ecosystem. However, these applications must comply with data authorization and regulatory compliance requirements before they can truly enter the global financial system.
Decentralized Governance
As the RedStone Distributed Data Association gradually transforms into a DAO (decentralized autonomous organization), community members will play a greater role in:
Adding Data Feeds
Optimizing Data Accuracy Mechanisms (Feed-Accuracy Protocols)
Adjust Fee Parameters
Striking a balance between decentralized governance and enterprise-level reliability will determine RedStone’s long-term positioning in the Web3 ecosystem and influence its future development.
in conclusion
RedStone quickly gained a competitive advantage in the market through a new oracle operation model:
Store data off-chain and provide it only when needed, reducing the burden on the blockchain and lowering gas fees.
Use economic incentives and cryptographic signatures to ensure data security and improve data accuracy and credibility.
It supports flexible deployment on multiple blockchains, making it easier for developers to integrate.
Although Chainlink still dominates, there is a growing demand for more professional, lower-cost, and higher-speed oracles, and RedStone is gaining a foothold in this market segment.
As the role of the RED token ( RED/USDT ) in network security and potential cross-chain governance increases, RedStone is not just a replacement for Chainlink, but is more likely to become a core part of Web3 data infrastructure.
If RedStone can:
Maintain a record of zero pricing errors and ensure data accuracy
Efficiently expand business models and optimize cost structures
Finding a balance between community governance and enterprise-level needs
In the future, RedStone is expected to become an efficient, flexible and truly decentralized preferred oracle, providing stable and sustainable data support for applications such as DeFi, NFT, supply chain, and financial markets.
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