TL;DR
- New York Life Investment Management (NYLIM), a global asset manager with $838B AUM, is integrating RedStone Settle to power its Centrifuge-tokenized US High Yield Bond Fund (HYB).
- The integration will give HYB holders instant, T+0 exits on a fund that settles natively in 3 days.
- The integration demonstrates how Settle bridges the gap between DeFi and RWA redemptions, which keeps the majority of $38B+ worth of RWAs out of DeFi.
High Yield, Low Exit Speed
HYB is NYLIM’s first tokenized product: a Centrifuge-issued, onchain version of its US high yield corporate bond strategy, with subscriptions and redemptions handled in USDC. The underlying portfolio, credit process, and risk management are unchanged from NYLIM’s traditional fund, only the wrapper is new.
That wrapper still settles the way high-yield credit always has: T+3. A holder who wants out has to wait for up to five business days for cash, because the fund is ultimately selling bonds, not swapping tokens. That timeline is unremarkable in traditional finance, but a hard stop in DeFi, where composability assumes an asset can be exited or liquidated on demand.
This is the same structural mismatch RedStone Settle was built to solve. While Settle first launched to handle RWA collateral liquidations inside lending protocols, HYB extends it to the fund’s own holders.
How RedStone Settle Unlocks T+0 Settlement
RedStone Settle runs a Dutch auction-based settlement system: KYC-verified solvers compete to deliver liquid capital immediately, in exchange for taking on the underlying position and collecting its eventual redemption at maturity. The solver, not the holder or the protocol, absorbs the wait. The settlement is resolved in an atomic transaction, the entire process taking less than a second, unlocking instant settlement for T+N assets.
Applied to HYB, that mechanism does two jobs at once. Firstly, it enables instant holder exits, at a defined discount to face value. An HYB holder who wants liquidity can now shortcut around the fund’s redemption cycle, with Settle’s solver network taking the token off their hands and delivering USDC at T+0. The token is then redeemed by the solver via the regular route, with the appropriate redemption period.
Besides that, Settle enables T+0 liquidations, a crucial precondition for DeFi utilization. Lending protocols that accept HYB as collateral face the redemption problem as well: if a borrower’s position needs to be liquidated, the protocol can’t wait three days for the underlying fund to redeem. Settle’s auction triggers the instant the position crosses its liquidation threshold, closing it at T+0 with the same solver mechanics used for exits. This applies to partial liquidations as well, such as Morpho’s de-leveraging mechanism.
Both cases reduce to the same primitive: converting the fund into a T+0 asset from the perspective of whoever needs to get out, which is what makes HYB usable as real DeFi collateral rather than a buy-and-hold token. Furthermore, Settle’s capacity is not limited to these, potentially extending to any onchain settlement instances from instantly resolving delayed transactions to T+0 redemptions on looping strategies. In essence, this gives RWAs the composability and speed of crypto-native assets, greatly expanding their potential and versatility as institutional treasury assets.
Multiple Morpho curators, including Gauntlet, Sentora, Re7 Labs, and Feather, already rely on RedStone infrastructure for the markets where asset complexity demands it. Additionally, RedStone is pricing Centrifuge’s other tokenized funds such as Janus Henderson Investors’ deJAAA and deJTRSY. An HYB-denominated Morpho market is already in the works.
Why it Matters Beyond HYB
Tokenized RWAs have crossed $38 billion onchain, but only a fraction of that is actually deployed as DeFi collateral. Most of the issuance sits idle precisely because lending protocols can’t safely liquidate assets with redemption windows measured in days or months. HYB is a concrete test of the fix: a real credit fund, from a large institutional manager, made to behave like a liquid asset for the purposes of exits and liquidations without changing anything about the fund itself.
The template is repeatable: any tokenized fund with a fixed redemption cycle is a candidate for the same treatment, positioning RedStone Settle as a settlement layer for tokenized credit issuers to plug into.
RWAs are onchain. Now they can move like it. RedStone Settle turns HYB’s three-day redemption into a T+0 exit, for holders, and for anyone lending against it.
Frequently Asked Questions
What is RedStone Settle?
RedStone Settle is an instant liquidation engine for RWAs with redemption above T+0. If a price shift puts a position up for liquidation, RedStone Settle runs a ~400ms auction among KYC-verified solvers, with the winner liquidating the position in an atomic transaction. If no bids come in, the transaction reverts and the liquidation proceeds the regular way.
What is HYB?
HYB is the ticker of the US High Yield Bond Fund by New York Life Investment Management, a global asset manager with $838B AUM, tokenized by Centrifuge. The fund, NYLIM’s first tokenized product, grants qualified investors yields based on corporate bond trading.
What does RedStone Settle unlock for HYB?
RedStone Settle enables any HYB holders to exit without having to wait through the fund’s T+3 redemption period, at a defined discount to face value, with USDC provided instantly by the solvers, who handle the native redemption in the background. The same mechanism also enables DeFi liquidations at T+0, including deleveraging in Morpho markets, with the first Morpho vault for HYB set to launch soon under Steakhouse Financial curation.
