RedStone Implements Instant Withdrawals for NYLIM Tokenized Fund

RedStone has unveiled its initiative to offer holders of Centrifuge’s tokenized NYLIM U.S. high-yield bond fund the ability to exit in the same block through off-chain auctions that last approximately 300 milliseconds.

In a September 1 announcement to crypto.news, RedStone revealed that its Settle service is being integrated with the NYLIM Anemoy U.S. High Yield Corporate Bond Segregated Portfolio, abbreviated as HYB.

HYB, issued via Centrifuge, is the first tokenized fund sub-advised by New York Life Investment Management, which currently oversees $838 billion in assets, a rise from $807 billion reported when the fund was launched in June.

This integration aims to enable holders of HYB, lending protocols, and liquidators to sell fund units in a single blockchain transaction. A liquidity provider supplies immediate capital, takes ownership of the units, and subsequently completes the fund’s standard redemption process.

While RedStone markets this service as T+0 settlement, the actual redemption period for HYB remains T+3. Instead, Settle shifts the waiting time to an approved liquidity provider willing to hold the units in exchange for a discount.

RedStone Settle utilizes a 300-millisecond auction

Upon identifying a position eligible for liquidation, RedStone initiates an off-chain auction that lasts approximately 300 milliseconds, according to Marcin Kazmierczak, co-founder and COO of RedStone.

KYC-verified and whitelisted liquidity providers, termed solvers, will bid based on the discount they anticipate from the HYB reference price. The winning bid, which is closest to a 0% discount, ensures the seller receives a price closest to the calculated value of the fund unit.

Once the auction concludes, RedStone combines the latest price update and the liquidation instruction into a single atomic on-chain transaction. Kazmierczak noted that this structure prevents front-running since both the price submission and execution occur simultaneously rather than in separate transactions.

Atomic execution ensures that every component of the transaction must succeed; otherwise, the entire operation is reverted. The winning solver is required to have a bonded deposit that can be slashed if they fail to provide the promised capital.

The solver then redeems the obtained HYB units through the issuer’s standard T+3 procedure and retains the auction discount as a reward for delivering immediate liquidity and accepting the redemption delay.

RedStone’s approach does not necessitate a large on-chain liquidity pool. The company stated that Centrifuge and NYLIM are not required to furnish capital for premature exits or alter the fund’s existing redemption processes.

“Tokenization solved issuance. It did not solve settlement — and settlement is what determines whether an asset can scale on-chain with broader utility,” Kazmierczak stated.

The executive emphasized that lending market curators must have confidence that liquidators can effectively dispose of collateral when a loan becomes under-collateralized. A known exit price and settlement timeframe could empower curators to establish lending limits without depending on an uncertain redemption queue, he added.

HYB auctions commence from administrator-derived NAV

Since high-yield corporate bonds do not trade continuously like cryptocurrencies, the HYB auction will start with a price derived from a net asset value (NAV) provided by the fund administrator rather than a price from a continuously operating spot market.

Kazmierczak confirmed that RedStone’s fundamental price feed will establish the initial value, utilizing NAV data from the fund administrator. Solvers will then compete by offering the percentage discount they require to acquire and redeem the units.

This pricing approach positions the fund administrator’s NAV at the core of the auction, while solver bids factor in the cost and risk associated with waiting through the redemption period. RedStone remarked that this structure could also accommodate voluntary redemptions and deleveraging transactions, rather than functioning only when a loan enters liquidation.

However, during market stress, the auction will still require sufficient capital from eligible solvers. When asked about the impact of too few providers participating or no viable bids, Kazmierczak noted that prefunded vaults would also participate in auctions, designed to maintain backstop liquidity available on-chain.

Consistent and justifiable pricing has remained a significant challenge for tokenized assets in lending. An August report on Stellar’s DeFi gap indicated that its real-world asset (RWA) market had surpassed $3 billion, while pools on Blend capable of accepting RWAs held slightly above $2 million.

RedStone highlighted in that report that tokenized corporate debt necessitates pricing systems that account for credit quality, maturity, settlement terms, and security structure. Data from the fund administrator is particularly critical when the underlying portfolio lacks continuous public market trading.

NYLIM’s HYB fund transitions from issuance to collateral

Centrifuge and NYLIM launched the HYB fund in June, granting eligible investors on-chain access to NYLIM’s U.S. high-yield corporate bond strategy.

Initially, subscriptions and redemptions settled in USDC, while NYLIM retained stewardship of the portfolio, the investment process, and risk management. Centrifuge is responsible for the tokenization and fund infrastructure, without managing the underlying bonds.

RedStone stated that HYB units will be available as collateral in markets built on Morpho, a decentralized lending protocol with isolated pools. Each Morpho market can establish separate collateral assets, loan-to-value limits, and liquidation parameters, keeping the conditions of HYB distinct from unrelated lending pools.

This integration could enable an eligible holder to borrow against HYB rather than liquidating the position, subject to the regulations and liquidity of the corresponding Morpho market. RedStone added that curators could utilize the auction’s settlement conditions to determine how much credit to extend against each unit.

In May, Morpho’s lending infrastructure was expanded to Tempo, where Gauntlet and Sentora introduced curated markets, and RedStone provided price feeds for stablecoins and tokenized RWAs. The HYB integration harnesses the three services—pricing, market curation, and lending—for a tokenized U.S. corporate bond portfolio.

Access will remain permissioned as HYB transfers necessitate approved participants. Kazmierczak indicated that other tokenized funds could adopt Settle, provided they support KYC or business-verification whitelists, connect to a reliable NAV feed, and maintain transparent redemption terms that enable solvers to accurately price the waiting period.

Tokenized credit introduces another high-yield product

HYB is entering a tokenized credit landscape that now features high-yield strategies from various established U.S. investment managers.

In August, Securitize launched a new fund managed in partnership with Neuberger Berman, primarily investing in high-yield bonds. RedStone stated that it also supplies pricing infrastructure for that strategy.

According to data from RWA.xyz cited in RedStone’s announcement, tokenized real-world assets surpassed $38 billion in August, up from about $5.4 billion in early 2025. Tokenized U.S. government debt is valued at $16.2 billion, while tokenized credit stands at $7.3 billion.

RedStone reported that more than 1.7 million addresses held tokenized real-world assets in August, reflecting a 56% increase month-over-month. However, wallet or blockchain addresses do not necessarily equate to the same number of individual investors.

Citi has projected tokenized assets could achieve a valuation of $5.5 trillion by 2030, while Standard Chartered estimates a $2 trillion market by 2028. Both projections are institutional forecasts rather than measured commitments or completed token issuances.