In the case study described below, RedStone, a pioneering Modular Oracle, has been the Avalanche Evergreen launch partner and delivers data feeds to dApps launched on Avalanche Spruce Testnet. The integration allows institutional parties to engage with the decentralized protocols, such as the blue-chip Aave Protocol or Voltz, the leading interest rate swap AMM, in a customized environment adjusted to corporate requirements.
What are Avalanche Subnets?
Avalanche Subnets are customized blockchains within the Avalanche platform that inherit consensus from the platform. They allow for unique configurations including:
- Different validator sets,
- Custom gas token, configuration and fees distribution,
- Privacy options like support for users KYC/KYB and,
- Capability to use custom VMs on a Subnet.
Avalanche Subnets support diverse use cases and interoperability, facilitating the creation of private or consortium chains within a unified ecosystem.
Evergreen & Spruce: Web3 heaven for institutions
Avalanche Evergreen Subnets are a suite of institutional blockchain deployments, customizations and tooling designed to address company-specific and industry-wide requirements for financial services. Crucially, we believe that the Evergreen Subnets maintain the benefits of public network development while enabling particular features historically only possible within enterprise solutions, like interacting with known and approved counterparties.
A key component in making Evergreen suitable chains for traditional finance (TradFi) organizations is their ability to implement customer and counterparty credentials and permissioning at the chain level of the tech stack. This allows institutions to continue addressing and managing requirements around KYC, KYB, investor suitability, etc., within their respective on-chain applications and ecosystems.
Specifically, the Spruce Testnet is a controlled environment that lets traditional buy- and sell-side institutions engage with public blockchain infrastructure and bluechip DeFi applications in a low risk, low barrier-to-entry way and test the possibilities of on-chain finance (OnFi).
“The deployment of an Aave pool on Spruce Testnet is a strategic initiative that demonstrates the commitment to fostering institutional engagement within DeFi, which brings transparency, security and decentralization,”
said Stani Kulechov, Aave Companies Founder and CEO.
RedStone adjusting to dApps’ needs in Classic model and familiar interface
RedStone Classic Oracle model provides a customizable solution that adapts to the specific needs of dApps, including customizable Heartbeat and Deviation Threshold parameters. Furthermore, its familiar Oracle interface creates a seamless integration with existing smart contract codes, enabling effortless deployment on EVM environments, as demonstrated by Aave’s seamless launch on the Spruce testnet. This flexibility recently extended to Voltz’s launch on Avalanche’s C-Chain, utilizing RedStone’s data feed for the critical interbank lending benchmark, the Secured Overnight Financing Rate (SOFR). Yet another example of how RedStone’s adaptability continues to bridge traditional finance and DeFi.
“Traditional finance has long been trying to interact with private blockchains with very little result. Avalanche’s Spruce Subnet starts a new chapter, and RedStone is proud to deliver data feeds to the Testnet, opening a dedicated bridge between TradFi and DeFi blue-chip dApps like Aave Protocol,”
said Marcin Kazmierczak, RedStone Co-Founder & COO.
Spruce & DeFi combination potential
Reputable global financial entities have already begun their journey with Spruce, recognizing its potential to create an effective entry point into the on-chain arena. The Spruce Testnet offers a tailor-made environment to engage with blockchain technology, bolstered by RedStone’s customizable data feeds. By delivering essential feeds like IB01 and Forex, RedStone is equipped to launch additional data feeds as needed, reinforcing the potential of Spruce to attract additional institutional involvement.
“As institutions increasingly appreciate the revolutionary capabilities of blockchain technology, the Spruce testnet reaps the benefits of public blockchain development and the latest in DeFi innovation in a controlled environment conducive for on-chain examination and experimentation. To that end, RedStone provides a key piece of infrastructure in enabling institutions to explore the merits of On-chain Finance (OnFi), including atomic settlement, lower counterparty risk, and reduced reliance on third party service providers,”
said Morgan Krupetsky, Ava Labs Director Of Business Development.
Since April 2023, Aave has been successfully operating on the Spruce Testnet with RedStone Oracles, adhering to Evergreen’s Subnet specifications, including user permissions. The final decision to migrate this integration to the Mainnet lies with the Aave Governance Forum, which would need to vote on a proposal to maintain a safe and secure launch within the ecosystem. In the meantime, RedStone stays in close contact with Avalanche about future needs and potential steps in this collaborative journey. For example, institutions request new TradFi-related feeds on Spruce, such as SOFR equivalent for EUR (€STR) and GBP (SONIA). The focus remains on conscious expansion and exploration, opening new avenues for OnFi.
RedStone is revolutionizing the Oracles industry by implementing novel modular design and 3 tailor-made data consumption models. Some of the most prominent builders in the space support such design including Stani (Aave & Lens), Sandeep (Polygon), Emin (Avalanche), Alex (zkSync), Justin (Lido) and others.
With RedStone you can build a new generation of DeFi & Web3 protocols based on RedStone’s versatile data offering of Blue-chip, LP, LST, Ecosystem-native tokens, as well as Real World Data (RWA) and custom feeds.