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Case Study: RedStone Oracles x Vesta Finance

Discover the results of Vesta Finance x RedStone Oracles Integration

Vesta has teamed up with RedStone, an innovative oracle provider. RedStone delivers a customizable, secure, and scalable solution that matches Vesta’s requirements. This partnership solidifies Vesta’s role as a prominent stablecoin protocol and sets the stage for growth. In a particular conversation, the Vesta team underscores why RedStone was their choice and how the integration process went.

What’s Vesta Finance?

Vesta operates as a layer 2-first stablecoin protocol, enabling users to maximize liquidity against their collateral. Users can secure their collateral and generate Vesta’s stablecoin, VST, which can then be transferred directly to their Ethereum address or any other Ethereum address. These unique collateralized debt positions are referred to as vaults.

The stablecoin tokens are economically geared towards maintaining a value of 1 VST = $1 USD, due to the following properties:

  1. The system is designed to always be over-collateralized – the dollar value of the locked Ether exceeds the dollar value of the issued stablecoins.
  2. The system algorithmically controls the generation of VST through a variable interest fee dictated by the token’s peg.

After opening a vault with some collateral, users may issue (“borrow”) tokens such that the collateralization ratio of their vault remains above 110%. A user with $1000 worth of underlying collateral in a vault can issue up to 909.09 VST.

The Vesta system regularly updates the price of the collateral against USD via a decentralized data feed. When a vault falls below a minimum collateralization ratio (MCR) of 110%, it is considered under-collateralized and is vulnerable to liquidation.

Vesta’s Oracle Needs

Vesta Finance expressed concern about the centralization of their previous oracle solution. As a protocol that prioritizes decentralization, they sought a more decentralized oracle infrastructure. With RedStone’s infrastructure, Vesta Finance can ensure a more secure and reliable oracle system that aligns with their values. This partnership between Vesta Finance and RedStone solidifies their commitment to decentralization and paves the way for a decentralized future in stablecoin protocols.

Moreover, Vesta Finance faced limitations in onboarding additional partnerships due to apprehension regarding the centralization of their existing oracle. In response, a strategic decision was made to seek an oracle integration with RedStone. This proactive approach allowed Vesta Finance to address the concerns raised by potential partners and create an environment conducive to fostering collaboration within the ecosystem.

Implemented Solution

Image showing technical chart of RedStone Oracles integration with Vesta Finance.

The Redstone team analyzed the liquidity that is available on-chain to identify the best sources that could be used for price discovery. Additionally, we implemented a short-term medianized TWAP fetcher connected to the Curve pool based on the learning from recent research made by Chaos Labs to further reduce the price manipulation risks. 

In the next step, we deployed a distributed multi-node infrastructure consisting of data provider nodes, relayer nodes and monitoring services. 

As a final outcome, Redstone is able to provide a continuous feed for the VST token price updated at a 0.2% deviation threshold. The data is available on-chain and could be consumed by standard interfaces familiar to most blockchain protocols.

Vesta Finance Team about RedStone

Our speaker is Mikey M, Co-Founder of Vesta. 

Why have you decided on RedStone?

RedStone’s transparency, quick communication, and custom-fit solution stood out to us in the wide range of oracle solutions.

How did the integration process look on your end?

It was great, we were offered many types of services and explained what each does to make sure we have the best fit for our token.

About RedStone

RedStone is revolutionizing the Oracles industry by implementing novel modular design and 3 tailor-made data consumption models. You can build the new generation of DeFi & Web3 protocols based on RedStone’s versatile data offering of long-tail, LP, LST, and Ecosystem-native tokens, as well as Real World Data and custom feeds.

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