TL;DR
- Instant exits: RedStone enables HYB holders to convert a T+3 redemption cycle into immediate USDC liquidity through solver‑driven auctions.
- Collateral utility: Lending protocols enable T+0 liquidations of HYB, allowing safe deleveraging and automated closes without waiting for fund settlement.
- Scalable model: The same RedStone mechanism can apply to any tokenized fund with fixed redemption windows, expanding RWA usability across DeFi.
RedStone is now reshaping how NYLIM’s HYB operates onchain, turning a traditionally slow credit wrapper into something DeFi can actually use. HYB, issued through Centrifuge, mirrors NYLIM’s established US high-yield corporate bond strategy, with subscriptions and redemptions settled in USDC.
The portfolio and risk framework remain unchanged from the offchain fund, but the wrapper still follows a T+3 settlement cycle. In traditional finance, that delay is routine; in DeFi, it breaks composability, blocking instant exits and limiting collateral utility. RedStone Settle is built to eliminate that bottleneck.
Instant exits for HYB holders
RedStone Settle introduces a Dutch auction settlement system that allows HYB holders to exit immediately. KYC‑verified solvers compete to provide capital upfront, taking on the underlying position and waiting through the fund’s redemption cycle. The holder receives USDC at T+0, while the solver absorbs the delay. The entire process resolves in an atomic transaction lasting less than a second, converting HYB into a T+0 asset from the perspective of anyone who needs liquidity.
Applied to HYB, this mechanism creates a defined discount exit path. A holder who wants out no longer waits up to five business days for the fund to redeem. Instead, Settle’s solver network purchases the token instantly and redeems it through the standard process. Nothing changes about the fund itself; only the settlement experience changes for the user.
Enabling T+0 liquidations for lending protocols
The same primitive applies to liquidations. Lending protocols that accept HYB as collateral face the same redemption bottleneck. If a borrower’s position needs to be closed, the protocol cannot wait three days for the fund to settle. RedStone triggers its auction the moment a position crosses its liquidation threshold, resolving the close at T+0. Partial liquidations, such as Morpho’s de‑leveraging flows, follow the same pattern.
This unlocks HYB as real DeFi collateral rather than a static, buy‑and‑hold token. Settle’s design can extend to any tokenized fund with fixed redemption cycles, offering a repeatable template for issuers. Multiple Morpho curators already rely on RedStone infrastructure, and RedStone is pricing other Centrifuge‑issued funds including deJAAA and deJTRSY.
A scalable settlement layer for tokenized credit
Tokenized RWAs have surpassed $38 billion onchain. Yet, only a small portion is deployed as collateral because protocols cannot liquidate assets with multi‑day redemption windows. HYB demonstrates a practical fix: a live credit fund made to behave like a liquid asset for exits and liquidations without altering its underlying structure. RedStone turns HYB’s three‑day redemption into a T+0 experience, giving RWAs the speed and composability of crypto‑native assets.
