Redstone Debuts Oracle for Instant DeFi Liquidations and MEV Capture

Redstone has unveiled a novel oracle solution called Atom, designed to enhance efficiency in decentralized finance (DeFi) lending protocols by enabling real-time liquidations and capturing miner-extractable value (MEV) [1]. The system addresses a critical limitation in traditional “push” oracles, which update asset prices at fixed intervals or after predefined deviations. Such delays often lead to missed liquidation opportunities during market volatility, forcing protocols to adopt overly conservative risk parameters, such as reduced loan-to-value ratios, to mitigate potential losses [1]. Atom’s architecture allows liquidators to trigger on-chain price updates instantly when favorable conditions arise, minimizing slippage and optimizing capital utilization [1].

The oracle’s primary innovation lies in its ability to capture MEV—a form of profit derived from reordering, inserting, or censoring transactions in blockchain networks—directly at the oracle layer. Historically, MEV in DeFi has exceeded $500 million, typically funneled to validators or block builders during liquidation races [1]. Atom reroutes this value back to lending protocols, enabling them to allocate the recovered funds toward incentives for users, increased yields for liquidity providers, or reduced borrowing costs [1]. This approach aims to create a more sustainable revenue model for DeFi platforms, which traditionally rely on transaction fees or token emissions.

Powering Atom is Fastlane Labs’ Atlas sequencer, which facilitates sub-300-millisecond atomic MEV auctions. When a liquidation condition is detected, participants bid for exclusive execution rights. The winning bid is settled simultaneously with the price update, ensuring minimal latency and maximizing efficiency [1]. This mechanism eliminates the need for off-chain components or protocol code modifications, as noted by Redstone co-founder Marcin Kazmierczak, who emphasized that protocols can now “decide how liquidation value is shared” [1].

Currently, Atom is operational on Unichain and supports additional chains including BNB Chain, Base, HyperEVM, and Berachain. Redstone’s existing infrastructure already delivers price feeds across 110+ blockchains, securing $8.5 billion in total value locked (TVL) for clients such as Compound and Morpho [1]. The deployment of Atom represents a strategic shift toward embedded MEV capture, with potential implications for improving capital efficiency and long-term sustainability in on-chain lending markets. By integrating MEV recapture into the core infrastructure, Redstone aims to address systemic inefficiencies in DeFi, offering protocols a more resilient and adaptive framework for risk management and revenue generation [1].

Source: [1] Redstone Debuts Oracle for Instant DeFi Liquidations and MEV Capture (https://api.news.bitcoin.com/wp-json/bcn/v1/post?slug=redstone-debuts-oracle-for-instant-defi-liquidations-and-mev-capture)