New York Life Investment Management (NYLIM) is integrating RedStone Settle with its tokenised U.S. high-yield bond fund.
New York Life Investment Management (NYLIM) is integrating RedStone Settle, an auction-based on-chain settlement layer on the RedStone network, with its tokenised U.S. high-yield corporate bond fund.
The integration applies to the NYLIM Anemoy U.S. High Yield Corporate Bond Segregated Portfolio (HYB), a tokenised fund issued by Centrifuge and sub-advised by NYLIM. It establishes a secondary market for HYB units, allowing lending protocols and holders to access guaranteed same-block exits.
RedStone Settle is designed to provide on-demand exits for redemptions, liquidations and de-leveraging. For HYB, this enables instant liquidation and redemption capabilities, as well as the ability to unwind leveraged positions in a single transaction.
The settlement layer uses an off-chain auction in which liquidity providers bid on the discount they require to facilitate an exit. The winning provider then settles the transaction on-chain in a single block, allowing the holder to exit before the fund’s standard redemption period.
The approach is intended to improve the use of tokenised funds as collateral in decentralised finance (DeFi), where lengthy redemption periods can make it difficult for lending protocols to manage liquidations. RedStone said the integration could also create new sources of demand for HYB units.
HYB units are expected to be used as collateral on Morpho, where isolated markets allow the fund to have its own risk parameters.
Marcin Kazmierczak, Co-Founder & COO at RedStone, said: “Tokenisation solved issuance. It did not solve settlement – and settlement is what defines whether an asset scales onchain with broader utility.”
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