RedStone Tackles LSD Oracle Solutions with Swell Network Partnership
RedStone, the Arweave utilising Web3 oracle solution maker, has announced another exciting collaboration. This time, they are partnering with Swell Network, a trailblazer in the Liquid Staking Derivative (LSD) space. RedStone assisted Swell with its Oracle needs and went above and beyond to make sure that Swell's liquid staking token (LST) token (swETH) pool's are as safe and guarded as can possibly be from manipulation.
Let's take a look!
RedStone x Swell Network
So what is Swell?
Swell offers a decentralised liquid staking protocol, allowing users to generate passive income by staking ETH, earning blockchain rewards, and obtaining a yield-bearing liquid staking token, swETH.
However, as Swell grew and evolved as an LSD, it faced obstacles with existing oracle offerings. These included limited reliable options, the need to establish robust and deep liquidity on swETH pools, and just a general lack of universal standards around oracle requirements for LSTs - something that RedStone is definitely solving.
This is where RedStone Oracles came into the picture to offer a robust solution to these problems.
RedStone implemented a price discovery mechanism based on the three most liquid DEXes where swETH tokens were deployed, namely Balancer, Uniswap V3, and Maverick. This addressed the requirement for establishing deep liquidity on swETH.
But even more interestingly, they provided a liquidity monitoring service to rearrange the pools in case of changes in the amount of deployed tokens in order to mitigate attempts to manipulate the price and the pools.
Unfortunately, just like many things in Web3 (that are still being developed), Decentralised Exchanges (DEXs) and their liquidity pools can easily be manipulated if there is a weak link somewhere in the chain of systems working together. And the chain also includes the Oracle that is providing the accurate price on-chain to the DEXs. RedStone understands this and is no stranger to analysing past hacks to better their Oracle and help others also understand the risks. Back in August 2022, Permaweb News reported on RedStone's mini-series highlighting crucial Oracle Hacks and Manipulations.
RedStone also facilitated the deployment of multiple data provider nodes, relayer nodes, and monitoring services to actively track the operations of data-providing infrastructure.
Looking forward, RedStone aims to actively promote the use of the price feed. This critical tool provides reliable, accurate, and current pricing information across various markets. By integrating projects that wish to utilise their SWELL platform, such as Sturdy, Gamma, Sommelier, and Olympus, RedStone aims to provide access to precise market data, enabling these projects to make better decisions and accelerate innovation.