RedStone’s Atom Protocol Unleashes Real-Time Liquidations and MEV Gold Rush for Lenders
DeFi just got sharper teeth. RedStone's Atom protocol is rewriting the rules for lending markets with instant liquidations and MEV capture baked directly into smart contracts.
No more waiting for oracle updates or watching bots front-run your positions. Atom's real-time price feeds trigger liquidations at blockchain speed—turning what was once a vulnerability into a protocol-owned revenue stream.
The MEV angle? Brutally clever. Instead of letting searchers vacuum up value from delayed liquidations, Atom protocol claims those arbitrage opportunities as protocol-native yield. Traders will scream, but treasury managers might just start dancing.
Typical finance—finding a way to monetize failure. But in DeFi's cold, efficient world, it's just another Tuesday.
Instantaneous Results
In a press release shared with CryptoPotato, Redstone, a modular oracle infrastructure for on-chain finance, announced the launch of ATOM today, the first native liquidation intelligence oracle.
The product introduces a new DeFi primitive by enhancing lending efficiency, enabling instant on-chain price updates, facilitating latency-free liquidations, and automating the capture of Maximal Extractable Value (MEV), all without requiring any code changes to the protocol.
Traditionally, decentralized finance (DeFi) lending protocols rely on “push” oracles that update on-chain prices at predetermined intervals or when a predefined divergence occurs, i.e., a 0.4% change from the last update.
During volatile markets, this leads to delays, missed liquidations, and lost revenue. To address this, protocols overcompensate with cautious risk parameters, lower Loan-to-Value (LTV) ratios, and higher liquidation thresholds, which ultimately reduce capital and yield opportunities.
Atom will tackle this by enabling liquidators to trigger real-time price updates at every liquidation opportunity, rather than waiting for the oracle to update the prices. This native intelligence will make it possible to:
- Capture more liquidation opportunities
- Safely increase LTV ratios
- Deliver better risk-adjusted returns
- Retain MEV that would otherwise leak to third parties
Liquidation MEV has been costly to DeFi protocols, as usually, this value is captured by validators or block builders that attempt to liquidate users during oracle lags as quickly as possible.
Redstone’s new product will capture that value inside the oracle LAYER itself, routing it directly to the protocol, essentially allowing for a reinvestment of what was recovered into protocol revenue, yield enhancement, and lower interest rates or fees for borrowers.
The Co-Founder of Redstone, Marcin Kaźmierczak, commented on the release:
“On-chain lending is entering a new phase of competition, and protocols need innovative, yet reliable, infrastructure to stay ahead.
Atom flips the liquidation model on its head. Instead of third parties profiting from user liquidations, protocols can now decide how that value is shared, whether through incentives, yield boosts, or borrower rewards.”
The Power Under The Hood
Atlas, an application-specific sequencer developed by FastLane Labs, powers the new product, making atomic MEV auctions a possibility. It’s triggered almost instantaneously once a liquidation condition is detected.
Bidders compete amongst each other for the exclusive right to carry out the liquidation, and the winning bid is settled on-chain upon the price update. It’s functional across all ethereum Virtual Machine (EVM) chains, without requiring any off-chain functionality.
By ingraining the MEV capture directly into the oracle layer, Atom introduces a new paradigm shift, moving beyond data delivery to enhance performance, capital efficiency, and sustainability.
