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RedStone Brings Real-Time Liquidations and Native MEV Capture to Lending Protocols With Atom

RedStone Brings Real-Time Liquidations and Native MEV Capture to Lending Protocols With Atom

CryptopotatoCryptopotato2025/07/28 16:00
By:Author: Dimitar Popov

This aims to bring a change to how oracles traditionally work.

The blockchain oracle company Redstone, which feeds data across hundreds of chains and rollups, has introduced a product designed to limit losses.

It will be fueled by FastLane Labs’ Atlas, an execution abstraction protocol for securing on-chain apps.

Instantaneous Results

In a press release shared with CryptoPotato, Redstone, a modular oracle infrastructure for on-chain finance, announced the launch of Atom today, the first native liquidation intelligence oracle.

The product introduces a new DeFi primitive by enhancing lending efficiency, enabling instant on-chain price updates, facilitating latency-free liquidations, and automating the capture of Maximal Extractable Value (MEV), all without requiring any code changes to the protocol.

Traditionally, decentralized finance (DeFi) lending protocols rely on “push” oracles that update on-chain prices at predetermined intervals or when a predefined divergence occurs, i.e., a 0.4% change from the last update.

During volatile markets, this leads to delays, missed liquidations, and lost revenue. To address this, protocols overcompensate with cautious risk parameters, lower Loan-to-Value (LTV) ratios, and higher liquidation thresholds, which ultimately reduce capital and yield opportunities.

Atom will tackle this by enabling liquidators to trigger real-time price updates at every liquidation opportunity, rather than waiting for the oracle to update the prices. This native intelligence will make it possible to:

  • Capture more liquidation opportunities
  • Safely increase LTV ratios
  • Deliver better risk-adjusted returns
  • Retain MEV that would otherwise leak to third parties

Liquidation MEV has been costly to DeFi protocols, as usually, this value is captured by validators or block builders that attempt to liquidate users during oracle lags as quickly as possible.

Redstone’s new product will capture that value inside the oracle layer itself, routing it directly to the protocol, essentially allowing for a reinvestment of what was recovered into protocol revenue, yield enhancement, and lower interest rates or fees for borrowers.

The Co-Founder of Redstone, Marcin Kaźmierczak, commented on the release:

“On-chain lending is entering a new phase of competition, and protocols need innovative, yet reliable, infrastructure to stay ahead.

Atom flips the liquidation model on its head. Instead of third parties profiting from user liquidations, protocols can now decide how that value is shared, whether through incentives, yield boosts, or borrower rewards.”

The Power Under The Hood

Atlas, an application-specific sequencer developed by FastLane Labs, powers the new product, making atomic MEV auctions a possibility. It’s triggered almost instantaneously once a liquidation condition is detected.

Bidders compete amongst each other for the exclusive right to carry out the liquidation, and the winning bid is settled on-chain upon the price update. It’s functional across all Ethereum Virtual Machine (EVM) chains, without requiring any off-chain functionality.

By ingraining the MEV capture directly into the oracle layer, Atom introduces a new paradigm shift, moving beyond data delivery to enhance performance, capital efficiency, and sustainability.

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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