Analyzing @redstone_defi's RedStone Atom RedStone Atom is an oracle system integrated with "liquidation intelligence." Core Modules: Module 1: Zero-Latency Liquidation Mechanism Module 2: Native OEV (Oracle Extractable Value) Capture Mechanism This thread will break down and evaluate these points technically. 2/15 Industry Benchmark: Traditional Push Oracles Most current DeFi lending protocols use push oracles. Their working model is to publish new prices on-chain at preset time intervals (e.g., every hour) or price deviation thresholds (e.g., 0.5%). The main economic consideration of this model is to control the Gas costs of on-chain transactions. 3/15 Direct Consequences of the Benchmark Model The limitation on update frequency leads to a delay between oracle prices and real-time market prices. To mitigate the risks brought by this delay, lending protocols must adopt conservative risk control parameters, such as setting lower loan-to-value ratios (LTV), which directly restricts the capital efficiency and user experience of the protocol. 4/15 Atom Module 1: Zero-Latency Liquidation Mechanism Atom adopts an on-demand update model. Its price updates are not time-driven but protocol-driven (i.e., triggered by the fulfillment of liquidation conditions). Any entity can call the oracle to immediately publish the latest price on-chain when any position becomes liquidatable, achieving zero latency. 5/15 Quantitative Impact of Zero-Latency Liquidation LTV Increase: The protocol can safely offer a higher LTV as the risk exposure is minimized. Bad Debt Risk Reduction: During rapid market price declines, liquidations can be triggered at better price points, avoiding excessive depreciation of collateral value, directly reducing protocol losses. User Benefit Optimization: Higher capital utilization and a safer protocol environment allow the protocol to offer users more competitive borrowing and lending rates. 6/15 Industry Background: Value Loss of OEV OEV (Oracle Extractable Value) refers to the profit opportunities created by oracle updates. In lending liquidations, this value is mainly reflected in liquidation bonuses. It is estimated that DeFi has leaked over $500 million, possibly as high as $2 billion in OEV value to external MEV arbitrage bots or liquidators. 7/15 Atom Module 2: Native OEV Capture Mechanism Atom captures OEV through a built-in, off-chain sealed bidding auction system. Process: 1. When liquidation conditions are triggered, Atom opens a sub-second (<300ms) auction window to the liquidator network. 2. Liquidators submit blind bids, competing for the exclusive execution rights of the liquidation. 3. The highest bidder's quote is directly paid to the protocol treasury. Liquidators earn the difference between the liquidation bonus and their bid. 8/15 Economic Benefits of OEV Capture This mechanism internalizes the previously externalized liquidation profits, bringing multiple benefits to the protocol: New Revenue Source: The protocol treasury gains stable cash flow, which can be used for buybacks, dividends, or bolstering reserves. Optimized User Incentives: This income can be used to enhance deposit rates or lower borrowing rates, directly benefiting users. Reduced Inflation Dependence: It decreases the protocol's need to incentivize liquidity through the issuance of governance tokens, making the model more sustainable. 9/15 Technical Implementation: FastLane Labs' Atlas Engine The functionality of Atom is supported by the Atlas engine. It is an application-specific sorter whose core function is to bundle three operations into a single atomic transaction: 1) On-chain price update from the RedStone oracle; 2) Execution of liquidation in the lending protocol; 3) Winning liquidator pays the auction amount to the protocol. 10/15 Trustless Design of the Atlas Architecture Atlas places all auction logic and transaction bundling logic entirely within on-chain smart contracts. This design fundamentally differs from solutions that rely on off-chain centralized relays like Flashbots. It does not introduce additional trust assumptions, ensuring transparency and resistance to censorship. 11/15 System Resilience of the Atlas Architecture The system incorporates two key fault-tolerant designs: Try/Catch Logic: The contract will sequentially attempt each liquidator's submitted liquidation transaction based on bid amounts. Even if a top-ranked transaction fails for some reason, it will automatically try the next one until successful. Automatic Fallback Mechanism: If there are no valid bids within the auction window, or all attempts fail, Atlas will still publish the new oracle price on-chain and then exit. At this point, the system reverts to the traditional liquidation model without additional delays. 12/15 Horizontal Comparison of OEV Solutions Market RedStone Atom | Zero Latency | Trustless | EVM Compatible | ~50% | API3 OEV Feeds | ~30 seconds delay | Trustless | EVM Compatible | ~80% | Chainlink SVR | Zero Latency | Trusted Relay | Ethereum Mainnet Priority | ~60% | 13/15 The above comparison provides DeFi protocols with a clear decision-making framework. Protocols need to weigh the following objectives: Speed vs. Risk Control: RedStone/Chainlink Profit Maximization: API3 Decentralization vs. Cross-Chain Deployment: RedStone/API3 14/15 Market Adoption and Ecosystem Status Integrated Protocols: Compound Finance, Morpho, Venus Protocol, etc., have integrated Atom on Unichain. Planned Network Expansion: BNB Chain, Base, HyperEVM, Berachain, Arbitrum, Ethereum Mainnet. Underlying Oracle Network: RedStone has covered over 110 chains, serving more than 170 projects, with a total value secured (TVS) exceeding $8 billion. 15/15 The emergence of Atom indicates that the functionality of oracles is evolving from a single data information service to an integrated value capture service. The OEV capture efficiency and value return capability of oracle providers have become key evaluation metrics for DeFi protocols when selecting infrastructure.