RedStone has announced plans to give holders of Centrifuge’s tokenized NYLIM U.S. high-yield bond fund same-block exits through offchain auctions lasting about 300 milliseconds.
Summary
- RedStone Settle will provide same-block exits for HYB, whose standard redemption period is T+3.
- KYC-approved liquidity providers will bid on the discount required to purchase fund units immediately.
- Atomic transactions and bonded solver deposits are designed to limit failed settlement and front-running.
- RedStone said prefunded vaults will supply backstop liquidity when direct participation is insufficient.
RedStone said in a Sept. 1 announcement shared with crypto.news that its Settle service is being integrated with the NYLIM Anemoy U.S. High Yield Corporate Bond Segregated Portfolio, known by the ticker HYB.
Issued through Centrifuge, HYB is the first tokenized fund sub-advised by New York Life Investment Management. NYLIM manages $838 billion in assets, according to the latest figure provided by RedStone, up from the roughly $807 billion reported when the fund was introduced in June.
The integration is designed to let HYB holders, lending protocols, and liquidators sell fund units within one blockchain transaction. A liquidity provider supplies the immediate capital, takes possession of the units, and later completes the fund’s regular redemption process.
Although RedStone describes the service as T+0 settlement, HYB’s underlying redemption period remains T+3. Settle instead transfers the waiting period to an approved liquidity provider willing to hold the units in return for a discount.
RedStone Settle uses a 300-millisecond auction
When RedStone identifies a position eligible for liquidation, the system runs an offchain auction lasting approximately 300 milliseconds, RedStone co-founder and COO Marcin Kazmierczak told crypto.news.
KYC-verified and whitelisted liquidity providers, called solvers, bid according to the discount they require from the HYB reference price. The bid closest to a 0% discount wins, meaning the seller receives the price nearest to the fund unit’s calculated value.
Once the auction ends, RedStone combines its latest price update and the liquidation instruction in one atomic onchain transaction. Kazmierczak said the structure prevents front-running because the price submission and execution happen together rather than through separate transactions.
Atomic execution also means every part of the transaction must succeed, or the entire operation reverts. According to Kazmierczak, the winning solver has a bonded deposit that can be slashed if it fails to supply the promised capital.
The solver then redeems the acquired HYB units through the issuer’s standard T+3 process and keeps the auction discount as compensation for providing immediate liquidity and accepting the redemption delay.
No large onchain liquidity pool is required under RedStone’s model. The company said Centrifuge and NYLIM also do not need to supply capital for early exits or change the fund’s existing redemption operations.
“Tokenization solved issuance. It did not solve settlement — and settlement is what defines whether an asset scales onchain with broader utility,” Kazmierczak said.
According to the executive, lending market curators need confidence that liquidators can dispose of collateral when a loan becomes undercollateralized. A known exit price and settlement time could allow curators to calculate lending limits without relying on an uncertain redemption queue, he added.
HYB auctions start from administrator-derived NAV
Because high-yield corporate bonds do not trade continuously like cryptocurrencies, the HYB auction will not begin with a price taken from a round-the-clock spot market.
Kazmierczak said RedStone’s fundamental price feed will determine the starting value using net asset value data derived from the fund administrator. Solvers then compete by submitting the percentage discount they require to acquire and redeem the units.
The pricing method places the fund administrator’s NAV at the center of the auction, while solver bids account for the cost and risk of waiting through the redemption period. RedStone said the structure can also process voluntary redemptions and deleveraging transactions, rather than operating only when a loan enters liquidation.
In a stressed market, however, the auction still requires enough capital from eligible solvers. Asked what would happen if too few providers participated or no suitable bid appeared, Kazmierczak said prefunded vaults would also join auctions and were intended to keep backstop liquidity available onchain.
Continuous and defensible pricing has remained a separate obstacle for tokenized assets used in lending. An August report on Stellar’s DeFi gap found that its RWA market had exceeded $3 billion, while pools on Blend that could accept RWAs held only slightly more than $2 million.
RedStone said in that report that tokenized corporate debt requires pricing systems to account for credit quality, maturity, settlement terms, and security structure. Fund administrator data is especially important when the underlying portfolio lacks continuous public trading.
NYLIM’s HYB fund moves from issuance to collateral
Centrifuge and NYLIM introduced the HYB fund in June, giving eligible investors onchain access to NYLIM’s U.S. high-yield corporate bond strategy.
Under the original structure, subscriptions and redemptions settle in USDC, while NYLIM retains responsibility for the portfolio, investment process, and risk management. Centrifuge supplies the tokenization and fund infrastructure rather than managing the underlying bonds.
RedStone said HYB units will be made available as collateral in markets built on Morpho, a decentralized lending protocol with isolated pools. Each Morpho market can set separate collateral assets, loan-to-value limits, and liquidation parameters, keeping the conditions attached to HYB apart from unrelated lending pools.
The integration could allow an eligible holder to borrow against HYB rather than sell the position, subject to the rules and liquidity of the relevant Morpho market. RedStone said curators could use the auction’s settlement terms when deciding how much credit to extend against each unit.
In May, Morpho’s lending infrastructure expanded to Tempo, where Gauntlet and Sentora introduced curated markets, and RedStone supplied price feeds for stablecoins and tokenized real-world assets. The HYB integration applies the three services—pricing, market curation and lending—to a tokenized U.S. corporate bond portfolio.
Access will remain permissioned because HYB transfers require approved participants. Kazmierczak said other tokenized funds could use Settle if they support KYC or business-verification whitelists, connect to a reliable NAV feed, and maintain clear redemption terms that let solvers price the waiting period.
Tokenized credit gains another high-yield product
HYB is entering a tokenized credit market that now includes high-yield strategies from several established U.S. investment managers.
In August, Securitize launched a separate fund managed with Neuberger Berman that invests mainly in high-yield bonds. RedStone said it supplies pricing infrastructure for that strategy as well.
RWA.xyz data cited in RedStone’s announcement placed tokenized real-world assets above $38 billion in August, compared with about $5.4 billion in early 2025. The same data put tokenized U.S. government debt at $16.2 billion and tokenized credit at $7.3 billion.
RedStone said more than 1.7 million addresses held tokenized real-world assets during August, following a 56% monthly increase. Wallet or blockchain addresses, however, do not necessarily correspond to the same number of individual investors.
Citi has projected that tokenized assets could reach $5.5 trillion by 2030, while Standard Chartered has estimated a $2 trillion market by 2028. Both figures remain institutional projections rather than measured commitments or completed token issuances.
