Background and Key Developments
In March 2025, Securitize, a global leader in tokenization, announced a strategic partnership with oracle service provider RedStone. The aim is to connect its institutional-grade tokenization funds (such as BlackRock’s BUIDL fund) to the DeFi ecosystem. This collaboration is seen as a crucial step for the RWA (Real World Asset) track toward compliance and liquidity innovation.
Previously, Securitize had secured a $47 million financing led by BlackRock and successfully launched the BUIDL fund. The fund is anchored on U.S. Treasury bonds and cash assets and reached a market value of $384 million in less than two months after its launch, surpassing similar products by Franklin Templeton to become the world’s largest tokenized U.S. bond fund. Through RedStone’s oracle technology, the underlying asset data of BUIDL will be introduced into mainstream DeFi protocols such as Compound and Morpho, allowing users to use tokenized U.S. bonds as collateral for lending or yield enhancement operations.
Technical Architecture and Compliance Innovation
The core of the Securitize and RedStone collaboration lies in addressing the challenges of data reliability and compliance for RWA assets applied on-chain. RedStone uses a modular oracle design that supports multi-chain environments such as Ethereum and Avalanche. It provides real-time price verification for tokenized assets like BUIDL through an on-demand dynamic data push mechanism. The technical highlights include:
- Cross-chain Compatibility: RedStone can synchronize off-chain asset data to different blockchain networks. For example, it maps BUIDL’s U.S. bond yield data to lending protocols on Polygon.
- Dynamic Data Verification: Combining zero-knowledge proof (ZKP) technology to ensure that the data used in on-chain contracts remains consistent with the off-chain asset status.
- Compliance Framework: Integrating KYC/AML interfaces with Securitize’s regulatory sandbox solution to meet the disclosure requirements of tokenized financial products under MiCA (EU Markets in Crypto-Assets Regulation).
In addition, RedStone’s oracle service currently covers $4.3 billion in on-chain assets. Its modular design allows institutional clients to customize data sources and update frequencies, providing technical support for the flexible application of RWA assets in DeFi scenarios.
Market Impact and Industry Effects
This collaboration has three major impacts on the crypto market and institutional investors:
- Liquidity Upgrade: The introduction of tokenized U.S. bonds such as BUIDL injects low-volatility assets into DeFi protocols. For instance, users can stake BUIDL on Compound to earn a stable annual yield of approximately 5% while retaining an automatic redemption right triggered by RedStone’s oracle. This dual attribute of “yield and liquidity” attracts traditional financial institution funds. Data shows that about 37% of the holdings in the BUIDL fund come from hedge funds and family offices.
- Regulatory Coordination Breakthrough: By establishing a compliant data link with RedStone, Securitize has resolved regulatory barriers for cross-border flows of RWA assets. For example, BUIDL holders can exchange tokens for USDC via Circle based on real-time exchange rate data provided by RedStone while complying with various countries’ foreign exchange management requirements. This design paves the way for institutional funds from Asia and Europe to enter the market.
- Ecosystem Expansion Potential: RedStone’s oracle service is not limited to U.S. bond funds. Securitize plans to bring additional institutional-grade RWA assets such as the Apollo Credit Fund (ACRED) into DeFi. It is expected that by the end of 2025, the total tokenized asset value under its management will exceed $5 billion. In addition, collaborations with institutions like JP Morgan and KKR are already in the testing phase, with potential future products including tokenized real estate and private equity.
Challenges and Future Outlook
Despite the broad prospects of the collaboration, Securitize and RedStone still face several challenges:
- Regulatory Policy Uncertainty: The U.S. SEC has not yet clarified the security classification of tokenized funds. If BUIDL is deemed an unregistered security, it may lead to the removal of related assets from DeFi protocols. In addition, the MiCA regulation in the EU may increase operating costs for oracle service providers due to compliance requirements such as local data storage.
- Technical Risks and Competitive Pressure: RedStone must ensure the security of cross-chain data transmission to avoid incidents similar to the Poly Network bridge attack. At the same time, competitors such as Chainlink have already launched dedicated RWA data services, intensifying the competition for market share.
- Market Acceptance Testing: The current RWA tokenization market is around $12.9 billion, accounting for only 0.01% of traditional financial assets. Institutional investors need time to build an understanding of on-chain yield models, and DeFi users have shown limited interest in low-yield U.S. bond products.
In the future, Securitize plans to consolidate its advantages by expanding application scenarios and enhancing compliance tools. For example, it will launch an “RWA Yield Aggregator” in Q2 2025 that allows users to configure asset portfolios including BUIDL and ACRED with one click, and provide liquidity support through exchanges such as JuCoin. It also plans to collaborate with Chainalysis to develop an on-chain anti-money laundering monitoring system that can track large transactions in real time and generate compliance reports.
The integration of RWA with DeFi is reshaping global financial infrastructure. The attempt by Securitize and RedStone demonstrates that compliance and technological innovation are key to unlocking trillions of dollars in traditional capital. For investors, focusing on the on-chain penetration of tokenized U.S. bonds and the pace of regulatory policy implementation will be a core strategy to capture the next market cycle.
Neason Oliver
