RedStone has announced plans to provide same-block exits for Centrifuge's tokenized NYLIM U.S. high-yield bond fund through its Settle service. According to RedStone's September 1 announcement shared with crypto.news, the integration allows HYB holders, lending protocols, and liquidators to sell fund units within one blockchain transaction. The service uses 300-millisecond auctions where KYC-approved liquidity providers bid on discounts required to purchase fund units immediately. Atomic transactions and bonded solver deposits are designed to limit failed settlement and front-running, with prefunded vaults providing backstop liquidity when direct participation is insufficient. The integration addresses a critical mismatch between traditional fund redemption cycles and DeFi market requirements.
The NYLIM Anemoy U.S. High Yield Corporate Bond Segregated Portfolio (HYB) is the first tokenized fund sub-advised by New York Life Investment Management, which manages ₹7,13,000 crore ($838 billion) in assets according to the latest figures provided by RedStone, up from approximately ₹6,80,000 crore ($807 billion) reported when the fund was introduced in June. HYB units will be made available as collateral in markets built on Morpho, a decentralized lending protocol with isolated pools. The fund replicates its existing US high-yield corporate bond strategy onchain, with investors subscribing and redeeming in USDC. The tokenized wrapper changes how investors access the fund, but the underlying portfolio and risk-management process remain the same as the traditional fund.
RedStone's Dutch auction system enables KYC-verified solvers to compete for liquidity upfront, creating a bridge between traditional fund redemption cycles and DeFi market requirements. According to RedStone, when RedStone identifies a position eligible for liquidation, the system runs an offchain auction lasting approximately 300 milliseconds. The solver receives the HYB position and waits for the fund's normal redemption, while the investor receives USDC at T+0 settlement. The mechanism allows investors to exit immediately rather than waiting several business days for cash, addressing the mismatch between traditional fund redemption cycles and DeFi market requirements where collateral must be liquidated immediately when positions become undercollateralized.
The RedStone integration significantly enhances HYB's viability as lending collateral in DeFi markets. If a borrower using HYB falls below a liquidation threshold, a DeFi protocol can use RedStone's solver network to exit the position immediately rather than waiting for the fund's traditional T+3 redemption cycle. The mechanism supports partial liquidations and deleveraging, making HYB more practical as DeFi collateral rather than simply a tokenized buy-and-hold investment. This capability addresses one of the biggest limitations of bringing traditional assets into DeFi, where immediate liquidity is essential for collateral management.
