GuShiio.com Using Pyth’s $2 billion FDV as a reference, each RED token should be priced at $2.
Original author: Poopman
compilation| Daily Planet
translator| CryptoLeo
Although the crypto market has been occupied by Meme, Meme and Meme in recent months, compared with the end of 2024, the focus of Meme hype has turned to an extremely “distorted” corner, from Trump’s coin issuance to the recent “Libra scandal”, Meme sentiment in the market has also declined accordingly. Please see the following figure for details:
On a data level, since the launch of the LIBRA token, pump.fun’s daily trading volume (including purchases and trading of newly issued tokens) has dropped 33.7% from US$184 million to US$122 million. In addition to trading volume, pump.fun has stalled in other aspects. On Tuesday, the platform registered only 59,000 new wallets, a low since November 17, 2024. Compared with the day of President Trump’s inauguration last month, the platform had approximately 110,000 active wallets. Compared with the current “Distorted Meme” stage, I miss the AI Agent Meme period a few months ago, but PvP is not the end of blockchain. Practicality and innovation are long-standing topics in the industry.
One of the projects that I am optimistic about combining practical and innovative recently is the Oracle project RedStone. The project completed US$15 million in Series A financing in July 2024 and released token economics a week ago. DeFi KOL Poopman wrote RedStone related content yesterday. The article analyzes RedStone’s advantages and potential from several perspectives such as RedStone’s modular advantages, market share and token economy. The Odaily Planet Daily compiles it as follows:
TL;DR
-RedStone’s modular architecture, AVS scalability, strong security and ultra-low latency make it one of the most trustworthy and fastest oracles in the ecosystem.
– In 2024, with US$3.8 billion TVS and more than 100 partners, RedStone has become the second largest oracle provider in the field.
-RedStone will have faster price updates, low latency, high stability and accuracy compared to other oracles during the $2 billion liquidation and Renzo (ezETH) decoupling in 2024.
– Its token RED is a revenue-based utility token that draws value from data and price feedback services. To improve capital efficiency, RED can be encapsulated as LRT and deployed in various DeFi protocols to gain additional benefits.
– Based on Pyth’s $2 billion FDV, RED dollars are expected to trade at approximately $2. The token economy is more focused on community growth, with 70% of tokens locked in in the first 12 months.
The current market cycle has deviated from fundamentals for some time, and everyone knows that this is unhealthy for the long-term development of the industry. Many of the tokens we know today are just bubbles or memes, and innovative protocols with real demand and mass adoption are still in the neglected stage.
Recently, RedStone Oracle announced that their token RED will soon be TGE. Its 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 five perspectives:
– Characteristics of RedStone
-RedStone Market Adoption
– Differences compared with other oracles
-RED token economy
-RED potential valuation
Why is RedStone better?
As we all know, oracle is one of the most important components of blockchain. Without oracle, blockchain is just a closed ecosystem and cannot access data from external sources. In today’s market, every chain and dApp requires a cost-effective, secure and flexible oracle.
And I believe RedStone has successfully filled this gap.
In recent years, RedStone has integrated and provided price predictors for hundreds of mainstream (Tier 1) protocols since day one. These include USDe, Pendle, Morph Blue, Berachain, EtherFi and Lombard BTC. But what makes RedStone a favorite for so many projects?
The reason is simple: security and modularity.
Security under AVS
Unlike other oracles, RedStone can use the EigenLayer AVS framework to verify the accuracy and effectiveness of price feedback data, thereby achieving more efficient Gas spending and scalability.
Odaily’s note: AVS is Actively Validated Service, which is the most important concept in the Eigenlayer ecosystem. AVS is simply a protocol, service or system that needs to be mortgaged to verify tasks. The AVS service itself is responsible for obtaining and reporting prices. At the same time, AVS also corresponds to its service management contract-Service Manager, which communicates with the Eigenlayer contract and contains status related to the service functions, such as the operator running the service and the amount of the 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. Because the on-chain verification process requires a large amount of Gas fees, it becomes quite expensive. With RedStone’s AVS, RedStone can provide highly optimized verification Gas by processing data offline.
The process is as follows: AVS operators obtain market prices and TWAP rates through the data source module, verify their accuracy, and then feed back the verification results to the chain.
Because most computing work is performed off-chain while remaining trustworthy and verified through AVS, RedStone provides a more cost-effective oracle solution compared to other solutions in the field.
modular
In addition to scalability, modularity is one of RedStone’s main advantages. The platform’s modules offer two modes: pull and push. Provide greater flexibility for the project by selecting managed or raw oracle data sources based on its specific needs. Projects can choose between carefully filtered and verified price feeds or customizable raw data streams to protect their assets.
Odaily Note: The pull model and push model are as follows:
Due to its modular architecture, RedStoneinfra allows seamless swapping of components from different systems without affecting system performance or reliability. The modularity of plug-and-play features makes RedStone one of the most universal oracle solutions in today’s DeFi innovative and emerging chain systems.
market indicators
customer growth
RedStone’s modular, plug-and-play architecture has driven user growth for its project, making it one of the fastest-growing oracle solutions in the blockchain space.
Throughout 2024, RedStone has significantly expanded its influence, established partnerships with more than 100 new customers and released on more than 30 chains. RedStone, with more than $6.8 billion in TVS, has become the industry’s second-largest provider of chain oracles, while Chainlink is mainly focused on the ETH ecosystem.
The platform’s reputation for reliability continues to appeal to mainstream DeFi participants. Among them, well-known partners include obtaining a US$3 billion TVS for Spark (Maker’s loan agreement), and providing price feedback to DeFi leaders such as Pendle and Ethena, as well as various BTC pledges, income stablecoins, LSTs and LRTs. Its customer list also reflects the industry’s confidence in RedStone’s reliable and customizable oracle solutions.
Price feedback time (low delay)
RedStone is one of the fastest and most reliable prophets in the field and remains decentralized, which is considered a trilemma dilemma. In terms of speed, RedStone’s update speed exceeds most centralized oracle machines (only Binance is slightly faster than Redstone). It’s nice that RedStone can compete with CEX while remaining decentralized.
stability
RedStone has also demonstrated reliability in market fluctuations, maintaining consistent and accurate price feedback at the most important moments. In the $2 billion liquidation event in February 2024, Redstone successfully pushed 119,000 updates within 24 hours, of which the ETH/USDC price was updated 30 points more than Chainlink, providing it with a more accurate price for updates.
It turns out that during the April 2024 Renzo (ezETH) decoupling period, RedStone was better able to keep up with price changes than Chainlink. During this period, RedStone released about 40 price updates in just 3 blocks, while Chainlink only pushed about 20 updates in the same period of time. This shows that RedStone is actually faster than the market-leading oracle provider. For details, please refer to the Chaos Labs report.
Comparative advantage: Each Oracle project has its own advantages, but RedStone draws on its strengths and integrates all features together.
Differences between RedStone and other Oracles
The following is a brief introduction to the mainstream oracle projects on the market:
Chainlink: It mainly targets EVM and OG DeFi, mainly adopts push model, uses CCIP and expensive integrated settings through bridging to provide reliable data, and only supports a small number of blockchains;
Pyth: mainly targets the non-EVM and Perps markets, mainly adopts the pull model, uses Wormhole as a cross-chain repeater, and focuses on data push quality;
RedStone: Any chain, any market, push models and pull models, use eigenlayer AVS for cost-effective on-chain verification, reserve proof of wrapped BTC assets, etc.
The following chart shows a comparison of the differences between three important oracle providers on the market:
TGE, RED’s token economics
As RedStone expands to thousands of on-chain protocols, RED tokens will play a key role in decentralizing oracle and capturing value from all integration projects. RedStone’s data providers (operators) have complete flexibility and they can set any collateral, charge any fee (with any token), or establish any requirements they want.
RED will serve as a utility token that holders can pledge and delegate to data providers to receive a share of fees and rewards.
In addition, RED will also allow re-pledge versions, allowing its LRT to be used in any DeFi protocol to free up additional economic value (similar to stETH).
Official data shows that the total supply of RED tokens is 1 billion. With an initial circulation of 30%, RED will be issued as an ERC-20 token, but can then be bridged to Solana, Base and all other supported networks via the Wormhole native transport standard.
RED’s design is community-centered: most of the token supply (48.3%) will be allocated to community growth plans, including airdrops, future donation plans and incentives, and 20% will be allocated to core contributors;
To ensure the long-term sustainability of RED, 70% of RED tokens will be fully locked out within 12 months after TGE and gradually unlocked over the subsequent 36 months.
As RedStone’s customer base grows, operators will receive more fees and will also increase revenue for RED token holders. A higher rate of return will lead to a higher token pledge rate, ultimately forming a positive feedback loop.
RED token valuation
The FDV of the leading oracle projects on the market has reached billions of dollars. They are both leading oracle protocols. Comparing RedStone with Chainlink and Pyth can better predict the price of the RED token:
With a total supply of 1 billion tokens, an initial price of 1 dollar would bring RedStone’s FDV to 1 billion, but given the project’s current market positioning, 1 dollar seems a bit conservative.
A better way to speculate on valuation would be to compare it with Pyth’s $2 billion FDV, which takes into account 30% of the initial circulating supply, and the price per token is $2, which is what I would expect for the RED token price.
Considering that if the market conditions improve, RED may reach Chainlink’s FDV, the token price may rise to US$20 per coin.
