RedStone and Voltz Team Up to Create SOFR Interest-Rate Swap Market on Avalanche
RedStone Finance has successfully integrated with Voltz Protocol to bridge another gap between traditional finance (TradFi) and DeFi. The partnership has resulted in the creation of a unique market for Secured Overnight Financing Rates (SOFR) based interest-rate swaps on the Avalanche blockchain.
Let's take a closer look!
RedStone X Voltz Protocol
RedStone announced their achievement via Twitter, stating that they have "brought TradFi and DeFi worlds a little closer together", by supplying crucial on-chain SOFR data feeds that helped launch the innovative market on Voltz.
Voltz Protocol, a non-custodial automated market maker (AMM) for interest-rate swaps, leverages the ability to create markets around any instrument with a variable rate. A prerequisite for such a market is the availability of the variable rate on-chain, a task that RedStone accomplished by publishing key SOFR rates on-chain. The data feeds provided by RedStone included the SOFR spot value, SOFR effective date of calculation, SOFR aggregate index, and SOFR index effective date. These feeds enabled Voltz Protocol to transpose the off-chain SOFR rates to on-chain, leading to the creation of their new SOFR interest-rate swap market on Avalanche.
In their blog, RedStone commented:
The integration of Voltz and RedStone revolutionized DeFi by transposing off-chain SOFR rates to on-chain, leading to the creation of a new SOFR interest-rate swap market on Avalanche. This milestone demonstrates the seamless fusion of traditional and decentralized finance, reaffirming Voltz’s growing impact in the DeFi sector.
As per a recent Coindesk article, Voltz Protocol is bringing a cornerstone of traditional finance on-chain. The SOFR is a key element of American finance used to set interest rates on loans, bonds, and other credit products in the U.S. However, it was predominantly off-chain and not widely known to the public. This move signifies a significant stride towards shifting TradFi onto Web3 infrastructure, with RedStone acting as the oracle provider for the raw data on SOFR.
Before this development, the specific variable rate that Voltz required existed solely off-chain, thus limiting its integration with the Voltz market. However, the on-chain publication of this rate by RedStone has changed the game, transforming what was previously a theoretical concept into a functional reality.
Check out the exclusive interview between RedStone and Simon Jones, CEO & Co-Founder of Voltz Labs on the RedStone blog here.
About RedStone
RedStone is revolutionising the Oracles industry by implementing novel modular design and 3 tailor-made data consumption models. You can build the new generation of DeFi & Web3 protocols based on RedStone’s versatile data offering of long-tail, LP, LST, Ecosystem-native tokens, as well as Real World Data and custom feeds.
