RedStone Oracles, a leading provider of oracle data for smart contracts, has introduced staking oracles crafted specifically for Bitcoin. This new feature allows users to stake their Bitcoin (BTC) and receive Bitcoin-based liquid-staking tokens (LSTs), such as Lombard Staked BTC (LBTC), on the Ethereum blockchain.
RedStone Oracles introduces Bitcoin staking oracles for BTC-based liquid staking tokens.This marks the first time BTC liquid staking tokens (LSTs) like LBTC are ready for DeFi use, enabling lending and more on Ethereum.
— Block Insider (@BlockInsider_) October 8, 2024
Marcin Kaźmierczak, RedStone’s co-founder and chief operating officer, briefly hinted on October 8, while speaking to Cointelegraph, that this is the first time Bitcoin LSTs can be used in decentralized finance (DeFi) for purposes like lending and more.
Staking Oracles and the Need for It
Simply drawn, blockchain oracles are services that act as bridges, connecting real-world data to blockchain systems. They ensure that real-world information is accurately verified and added to the blockchain, making them essential for many DeFi apps.
Oracles play a rare role in various DeFi protocols, especially in lending and staking. In lending, users can take out loans against their crypto holdings, while staking allows them to earn rewards by locking their crypto assets in smart contracts. As staking continues to grow in popularity, oracles have become crucial for verifying important information, such as staking rewards and slashing events, to ensure LSTs like Lido Staked Ether (stETH) work correctly.
Supercharging LSTs RedStone is the only oracle to provide the $ETHx price feed from @staderlabs in both the gas-optimized On-Demand Pull and Push Oracle models pic.twitter.com/ztaXDmbuM2
— RedStone Oracles (@redstone_defi) February 9, 2024
Expanding Bitcoin LSTs Beyond Liquidity Provision
Before RedStone’s launch of Bitcoin staking oracles, Bitcoin LSTs were limited to providing liquidity on decentralized exchanges (DEXs), as they didn’t require oracle services. Now, thanks to RedStone’s innovation, users can utilize Bitcoin LSTs, like LBTC, in DeFi lending platforms such as Morpho and Compound. Additionally, users can combine the power of these oracles and LBTC on Gearbox Protocol to create leverage.
“As a Bitcoin holder, you can stake your Bitcoin through Babylon or Lombard to receive LBTC, the LST token on Ethereum’s mainnet,” Kaźmierczak explained. He also emphasized that without oracles, LBTC would be restricted to liquidity provision on DEXs, which don’t rely on oracles.
Kaźmierczak believes that the introduction of Bitcoin staking oracles will spark immediate growth in the DeFi ecosystem surrounding Bitcoin LSTs, similar to the growth seen around Ethereum LSTs. “Even a small percentage of yield on a large underlying asset like Bitcoin can have a massive impact,” he added.
RedStone’s Growth and Future Prospects
This launch comes on the heels of Redstone Oracles raising $15 million in a Series A funding round led by Arrington Capital, a major player in crypto investment.
RedStone is excited to announce a $15M Series A fundraising round, led by @Arrington_Cap to expand its Modular Oracle product pic.twitter.com/d8wNIJ0uPr
— RedStone Oracles (@redstone_defi) July 2, 2024
RedStone’s new Bitcoin staking oracles represent an exciting development in DeFi, paving the way for more Bitcoin holders to take part in the expanding ecosystem.
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