1. Introduction

1.1 Background and Purpose

In recent years, the cryptocurrency market has shown a rapid development trend, attracting widespread attention from investors worldwide. From the birth of Bitcoin, which opened the era of decentralized digital currencies, to the current proliferation of thousands of different types of cryptocurrencies, the total market value of this market has reached the trillion-dollar level, and trading activity continues to rise. In this market full of innovation and change, various emerging projects continue to emerge, attempting to leverage the advantages of blockchain technology in different fields, and RedStone is one of them.

RedStone, as a multi-chain oracle platform focusing on decentralized finance (DeFi), aims to build a bridge between the blockchain and real-world data. In the DeFi ecosystem, the execution of smart contracts highly relies on accurate external data, such as asset prices, interest rates, etc. RedStone, through its unique ‘modular architecture’ and ‘on-demand fetching’ mode, can provide efficient and flexible data services for EVM (such as Ethereum, Polygon) and non-EVM (such as Movement, Sonic) chains. It has supported over 60 blockchain networks, with a wide coverage, gradually making a name for itself in the oracle track.

2. RedStone project comprehensive analysis

2.1 Basic Overview of the RedStone Project

RedStone is a multi-chain oracle platform focused on the field of decentralized finance (DeFi), playing a crucial role in the entire blockchain ecosystem. Simply put, an oracle is like a bridge, connecting the virtual world of the blockchain with real-world data. In blockchain, the automatic execution of smart contracts relies on accurate external data inputs, such as the real-time asset prices needed to determine the value of collateral and borrowing limits in DeFi lending protocols; in derivative trading, real-world financial data is needed for pricing and settlement. However, the blockchain itself is a relatively closed system and cannot directly access off-chain data, which highlights the importance of oracles.

RedStone innovatively adopts a ‘modular architecture,’ which separates functional modules such as data collection, processing, and transmission. In this way, RedStone can achieve more efficient data processing and more flexible functionality expansion. Different modules can be independently optimized and upgraded without affecting each other, greatly enhancing the system’s stability and maintainability. At the same time, RedStone also uses an ‘on-demand pull’ mode, which allows DeFi protocols to actively retrieve specific data from RedStone based on their actual needs, instead of continuously pushing large amounts of data like traditional oracles, effectively reducing Gas fees and improving the efficiency and accuracy of data transmission.

Currently, RedStone has successfully supported more than 60 different blockchain networks, covering EVM (Ethereum Virtual Machine) compatible chains such as Ethereum, Polygon, Arbitrum, as well as non-EVM chains like Movement, Sonic, etc. This extensive multi-chain support capability enables RedStone to meet the diverse needs of various blockchain projects, providing a unified and efficient data service for the entire blockchain ecosystem. Whether it is an emerging blockchain project or a mature DeFi application, they can easily connect to real-world data and promote their business development through RedStone’s services.

2.2 Unique Technological Advantages and Application Scenarios

RedStone’s “modular architecture” endows it with many significant technological advantages. First, in terms of data processing efficiency, the separation of modules allows data collection and processing to be done in parallel, greatly reducing the time for data acquisition and processing. For example, when processing a large amount of cryptocurrency price data, different data collection modules can simultaneously gather price information from multiple data sources, then consolidate and verify this information in the processing module, and finally provide accurate data quickly to the required DeFi protocols through the transmission module. Secondly, in terms of scalability, the modular architecture allows RedStone to easily integrate new functional modules and data sources. When new blockchain networks or data types emerge, only the corresponding modules need to be developed and integrated, without the need for massive system-wide changes, reducing the development and maintenance costs of the system.

The ‘on-demand fetching’ mode also brings unique advantages to RedStone. On the one hand, it effectively reduces Gas fees. On the blockchain, each data transmission and operation consumes Gas fees, and the traditional oracle’s continuous data push method will result in a large amount of unnecessary Gas consumption. The ‘on-demand fetching’ mode of RedStone only transmits data when the DeFi protocol requests it, avoiding redundant data transmission and saving users a significant amount of Gas fees. On the other hand, this mode can provide customized data push services according to the specific needs of DeFi protocols. Different DeFi protocols have different data requirements, and the ‘on-demand fetching’ mode allows RedStone to accurately meet these personalized needs, improving the targeted ness and effectiveness of data services.

Based on these technical advantages, RedStone has a wide range of applications in multiple fields. In DeFi protocols, it provides real-time asset price data for lending protocols, ensuring accurate collateral valuation during the lending process and reducing borrowing risks. In decentralized exchanges (DEX), the market data provided by RedStone can help achieve more precise trade pricing and liquidity management. In the insurance field, it can provide real-time risk data to help insurance contracts accurately assess risks and price them reasonably. Additionally, in prediction markets, stablecoin issuance, and other areas, RedStone also plays an important role in providing reliable data support for these applications, driving their stable operation and development.

2.3 Team Background and Partner Relationships

The team members of RedStone have rich experience and professional knowledge in the blockchain and oracle fields. Although the team background has not been fully disclosed, from the project’s development process and achievements, they have accumulated considerable reputation in the oracle track. The team members include senior developers of Ethereum, who have deep technical expertise in the underlying development of blockchain technology, smart contract writing, and provide solid guarantee for the technological innovation and stable operation of RedStone. For example, in the development process, the team fully utilized their experience in the Ethereum ecosystem to optimize the interaction between RedStone and EVM-compatible chains, improving the efficiency and security of data transmission.

In terms of partnerships, RedStone has established close cooperation with many well-known institutions and projects. In 2024, RedStone established partnerships with over 100 new customers and released applications on over 30 chains, with a total locked value (TVL) exceeding 6.8 billion US dollars, rapidly rising to become the second-largest multi-chain oracle provider. It has partnered with many well-known DeFi protocols such as Spark, Pendle, Ethena, bringing more application scenarios and users to RedStone, and further enhancing its influence in the DeFi field. Through deep cooperation with these partners, RedStone can better understand market demands, continuously optimize its products and services, and provide users with high-quality data solutions. At the same time, partners leverage RedStone’s technological advantages to enhance the competitiveness of their own projects, achieving a win-win situation.

3. Economic Analysis of RED Token

3.1 Token Issuance and Distribution Mechanism

The total supply of RED tokens is set at 1 billion, and this fixed total plays a fundamental role in the construction of the project’s economic model. In the entire token distribution system, each part has a clear distribution ratio, and different distribution destinations have different potential impacts on the market.

1. The community growth part accounts for 48.3%, this relatively large proportion reflects the project’s high regard for community construction. The community plays a crucial role in the development of cryptocurrency projects and is the cornerstone of the project ecosystem.

2. Team allocation accounts for 20%, which is an incentive and reward for team members’ efforts in project development, operation, and maintenance. An excellent team is one of the key factors for project success, and they need to invest a significant amount of time and energy to drive the project forward. The allocation of this portion of tokens can ensure that the interests of team members are closely tied to the long-term development of the project. In order to maximize the value of the tokens they hold, team members will work even harder, continuously optimize the project’s technology, expand the project’s application scenarios, and enhance the project’s service quality.

3. Strategic partners receive a 15% token allocation. Strategic partners can bring various resources and advantages to the project during its development, such as technical cooperation, market channel expansion, and enhanced brand influence.

4. The liquidity part accounts for 10%, and these tokens can be used at the Token Generation Event (TGE) to maintain market liquidity. Liquidity is one of the important indicators of the cryptocurrency market. Sufficient liquidity can ensure smooth market trading, reduce trading costs, and improve market efficiency.

5. Advisors receive 6% of the tokens. Advisors usually have rich industry experience and professional knowledge, and they can provide valuable advice and guidance for the project. By allocating tokens, advisors can be motivated to actively participate in the development of the project and provide advice for the project.

6. Airdrop accounts for 0.7%. Airdrop is a common way for projects to attract new users and reward early supporters. By airdropping tokens, it can expand the user base of the project, increase the project’s visibility and influence.

3.2 Unlocking plan and circulation of tokens

The RED token adopts a phased unlocking plan, with only 28% of the initial circulation accounting for the total supply, and the remaining 72% of the tokens will be gradually unlocked according to a predetermined unlocking plan over the next 4 years. This phased unlocking model has various impacts on the market price.

In the early stages, a lower initial circulation makes the relatively small number of RED tokens available for trading in the market. According to the principle of supply and demand, when the market demand remains unchanged or increases, the relatively reduced supply will lead to upward pressure on prices.

As time passes, tokens are gradually unlocked, and the circulating supply in the market gradually increases. This will put certain downward pressure on prices. In addition, the token unlocking plan will also affect investors’ expectations. When making investment decisions, investors will not only consider the current market situation but also pay attention to the future token unlocking situation. If investors anticipate that an increase in market supply after future token unlocking will lead to price declines, they may adjust their investment strategies in advance, reduce holdings of RED tokens, or delay purchase plans. On the contrary, if investors are confident in the project’s development prospects and believe that the project’s growth can absorb the supply increase brought about by token unlocking, they may continue to hold or increase their investment in RED tokens. Therefore, projects need to plan token unlocking schedules reasonably and disclose relevant information to the market in a timely manner to guide investors in forming reasonable expectations and stabilizing market prices.

4. Historical Price Trend and Volatility Analysis of RED

4.1 Detailed historical price data review

Since the launch of the RedStone project, the price trend of the RED token has been closely watched by the market. In the early stages of listing, the RED price showed significant volatility. Due to the high market attention to newly listed projects and the attraction of the Launchpool mechanism that has drawn a large number of investors, the RED price quickly surged in the short term. At the opening, the RED price rose to around $0.9 fueled by market enthusiasm. However, as early investors took profits, selling pressure gradually emerged, leading to a price pullback. In the following week, the price fell to around $0.65. The price fluctuations during this phase were mainly due to the market’s unstable understanding of the new token, resulting in frequent buying and selling behavior by investors, causing rapid changes in supply and demand in the short term.

Subsequently, during March, the RED price showed a relatively stable and fluctuating trend, with prices fluctuating around the range of 0.4 - 0.55 US dollars.

In order to more intuitively display the historical trend of RED prices, the following is the price trend chart of RED:

4.2 Key Drivers of Price Fluctuations Analysis

• Market Supply and Demand: The market supply and demand situation of RED is a direct factor affecting its price fluctuations. On the supply side, the issuance and unlocking plan of the token play a key role. As mentioned earlier, the total supply of RED tokens is 1 billion, with an initial circulation of 280 million (28%), and the remaining 72% of tokens will be gradually unlocked over the next 4 years according to the established unlocking plan. When a large number of tokens are unlocked and enter the market, if there is not enough demand to absorb them, it may lead to oversupply, putting downward pressure on prices. For example, during a future peak unlocking period, the sudden increase in token supply in the market may increase selling pressure for investors, leading to price declines. Conversely, when there is strong demand for RED in the market, such as when many DeFi projects start using RedStone’s oracle services and need to purchase RED tokens to participate in the ecosystem, an increase in demand will drive prices up.

• Project Progress and Cooperation: The development progress of the RedStone project and its cooperation relationships have a significant impact on the price. Breakthroughs in technical innovation, application scenario expansion, etc., can enhance market expectations of its value. For example, when RedStone successfully optimizes its “modular architecture” to improve data transmission efficiency and accuracy, this will attract more DeFi projects to use its services, thereby increasing demand for the RED token and driving up prices. Cooperation relationships are also important influencing factors. Collaborating with well-known DeFi protocols such as Spark, Pendle, Ethena, etc., can not only bring more business opportunities and users to RedStone but also enhance the project’s visibility and market influence. When announcing cooperation with these well-known projects, market confidence in RedStone strengthens, and investors are willing to buy RED tokens, driving prices up.

• Macroeconomics and cryptocurrency market environment: The macroeconomic situation and the overall environment of the cryptocurrency market also have a significant impact on the price of RED. During periods of stable global economic growth and loose monetary policy, investors are more willing to invest in risk assets, benefiting the cryptocurrency market, including various cryptocurrency prices such as RED may rise. Conversely, when the macroeconomic situation is poor, such as economic recession, worsening inflation, investors reduce their allocation to risk assets, impacting the cryptocurrency market, and RED prices may fall. In addition, the overall sentiment and trends of the cryptocurrency market will also affect the price of RED. When the market is in a bull market, investors are generally optimistic, with a large influx of funds into the cryptocurrency market, RED prices often follow the market’s rise. Conversely, in a bear market, market confidence is low, funds flow out, and RED prices are also affected.

• Market Sentiment and Investor Expectations: Market sentiment and investor expectations play important roles in the price fluctuations of RED. The cryptocurrency market is highly influenced by emotions, and discussions and evaluations on channels such as social media and cryptocurrency forums can affect investor sentiment. When there is a lot of positive news about the RedStone project in the market, such as technological breakthroughs and smooth progress in partnerships, investors will be confident in the project’s prospects, generating a positive market sentiment and willing to buy RED tokens, driving the price up. Conversely, negative news, such as security vulnerabilities or slow project progress, can cause investor concerns and panic, leading to a decline in market sentiment, investors selling RED tokens, and prices falling. Investor expectations also influence price trends. If investors expect the future price of RED tokens to rise, they will buy in advance, driving the current price up. Conversely, if they expect the price to fall, they will sell in advance, leading to a price decrease.

5. Multidimensional Factors Affecting RED Price

5.1 Impact of Market Supply and Demand Relationship

The supply side of the RED token is primarily controlled by its issuance and distribution mechanism, as well as the unlocking schedule. As mentioned earlier, the total supply of RED tokens is fixed at 1 billion, with an initial circulating supply accounting for only 28%. The remaining 72% will be gradually unlocked over the next 4 years. When a large number of tokens are unlocked, the supply in the market will significantly increase. If market demand does not correspondingly rise at that time, according to the laws of supply and demand, an oversupply could put downward pressure on the price of RED. For example, during a peak unlocking period, a large amount of unlocked RED tokens could enter the market, and if the demand for RedStone project services grows slowly, investors might sell off their RED tokens to avoid asset depreciation, triggering a price drop.

5.2 Promotion or Constraint of Project Development Progress

The technical upgrade of the project is one of the key factors affecting the price. If RedStone can continuously optimize its ‘modular architecture’ and ‘on-demand fetching’ mode, improve the efficiency, accuracy, and security of data transmission, it will attract more blockchain projects and DeFi protocols to cooperate with it. For example, when RedStone successfully reduces the latency of data transmission, enabling DeFi protocols to obtain accurate market data in a more timely manner, it will enhance the operational efficiency and user experience of DeFi protocols, thereby increasing the demand for RedStone services and driving up the price of RED. Conversely, if the technical upgrade encounters bottlenecks and fails to meet the growing market demand for data services, such as data transmission errors or excessive delays, it may lead to the loss of existing customers, potential customers hesitating, and have a negative impact on the price of RED.

5.3 The role of macroeconomic and policy environment in

Global economic conditions have a profound impact on the price of RED. During periods of stable and prosperous global economic growth, investors’ risk appetite is usually higher, and they are more willing to invest in emerging assets with high growth potential, benefiting the cryptocurrency market. At this time, investors are more optimistic about the prospects of the RedStone project, willing to buy and hold RED tokens, driving up the price. For example, when the global economy is in an expansion phase, corporate profits increase, consumer confidence strengthens, liquidity is abundant, and a large amount of funds flow into the cryptocurrency market, including various cryptocurrencies like RED, prices may experience an uptrend. Conversely, when the global economy faces recession risks such as slowing economic growth, rising unemployment, and declining corporate profits, investors tend to be more cautious, reducing investments in risk assets and increasing allocations to safe-haven assets. In this scenario, the cryptocurrency market is often impacted, and the price of RED may decline. This is because investors are concerned that during periods of economic instability, the development of the RedStone project may be hindered, leading to a decrease in the token’s value and consequently selling off RED tokens.

5.4 The Impact of Market Sentiment and Investor Behavior

Investor sentiment has a significant impact on the price of RED. In the cryptocurrency market, investor sentiment is often easily influenced by various factors, causing fluctuations. When there is a lot of positive news about the RedStone project in the market, such as technological breakthroughs, the establishment of new partnerships, and the expansion of use cases, investors will be confident in the future development of the project, creating a positive market sentiment. This positive sentiment will prompt investors to buy RED tokens, driving up the price. For example, when RedStone announces the successful development of a new generation of oracle technology that significantly improves data transmission efficiency and accuracy, investors in the market will be optimistic about the project’s prospects, buying RED tokens in succession, leading to a rapid price increase. Conversely, negative news such as security vulnerabilities being exposed, slow project progress, or the breakdown of partnerships will cause investor concerns and panic, resulting in low market sentiment. In this situation, investors will sell RED tokens to avoid asset losses, leading to a price drop. For example, when RedStone is exposed to security vulnerabilities that may result in data leaks or smart contract attacks, investors will question the project’s security, sell their RED tokens, and trigger a price collapse.

6. the prediction model and method of RED price

Fundamental Analysis Model

The fundamental analysis model is built on the fundamental factors of the project, aiming to predict price trends by analyzing the impact of these factors on the price. For the RedStone project, there are many fundamental factors that affect the price of RED, including the project’s technical strength, team background, partner relationships, market competitive landscape, etc. These factors are intertwined and collectively influence the price of RED.

To build a fundamental analysis model, first determine the direction and weight of each factor’s impact on price. Use a combination of expert scoring method and Analytic Hierarchy Process (AHP) to determine. Invite experts in the blockchain field to score the importance of each factor. For example, for technical strength, experts believe that it has a significant impact on price and give it a higher weight; while for some relatively minor factors, give them a lower weight. Then, through the Analytic Hierarchy Process, construct a judgment matrix to calculate the relative weights of each factor. Assuming that after calculation, the weights of each factor are as shown in the table below:

Collect the relevant fundamentals of the RedStone project and quantify each factor. For technical strength, evaluate aspects such as technical innovation capabilities and technical stability. Relevant information can be obtained through the project’s technical whitepaper, open-source code repository, etc. Give a quantitative score to the technical strength factor based on certain scoring criteria, assuming 8 points (out of 10). For team background, evaluate based on team members’ professional experience, industry reputation, etc., assuming a score of 7 points. For partner relationships, evaluate based on the number of cooperative projects, influence, etc., assuming a score of 8 points. For market competition landscape, analyze RedStone’s market share in the oracle market, strength of competitors, etc., assuming a score of 6 points. For other factors such as community activity, evaluate based on discussion heat on social media, community member participation, etc., assuming a score of 7 points.

Based on the weight and quantified score of each factor, calculate the fundamental evaluation value of the RED price. The calculation formula is: Fundamental evaluation value = Technical strength score × Technical strength weight + Team background score × Team background weight + Partner relationship score × Partner relationship weight + Market competition score × Market competition weight + Other factor score × Other factor weight. Substituting the above scores and weights into the formula, the fundamental evaluation value can be obtained as 8×0.3 + 7×0.2 + 8×0.25 + 6×0.15 + 7×0.1 = 7.3.

Compare and analyze the fundamental evaluation value with the historical prices of RED to establish a price prediction model. Find the relationship between the fundamental evaluation value and the price through methods such as regression analysis. Assuming that after analysis, the linear relationship between price and fundamental evaluation value is: price = 0.5× fundamental evaluation value + 0.1. Based on this relationship, when the fundamental evaluation value is 7.3, the predicted RED price = 0.5×7.3 + 0.1 = 3.75.

However, there are certain limitations to fundamental analysis models. On one hand, the quantification of fundamental factors involves a certain subjectivity, and different experts may give different ratings and weights. On the other hand, the market conditions are complex and ever-changing, some unforeseen factors may not be reflected in fundamental analysis, leading to deviations between predicted results and actual prices. Therefore, when using fundamental analysis models, it is necessary to combine other analytical methods and make a comprehensive judgment on price trends.

7. Short-term forecast results for RED price

Short-term (1-3 months) price prediction

Considering the current market conditions and predictive models, the price of RED is expected to fluctuate within a certain range and show an upward trend over the next 1 to 3 months. From the perspective of market supply and demand, there is a sustained growth in demand for RedStone’s oracle services, with an increasing number of DeFi protocols starting to take notice and attempt integration with RedStone. This will drive higher demand for RED tokens. For example, some emerging DeFi lending projects are currently negotiating partnerships with RedStone, and once these collaborations are finalized, these projects will need to purchase RED tokens to access the oracle services, thereby boosting demand. On the supply side, while some tokens will be unlocked in the coming months, the project team may take certain measures to regulate market supply, such as through token buybacks or locking a portion of the tokens, in order to prevent a significant increase in supply from impacting the price.

Based on the prediction results of time series analysis models (such as the ARIMA model), combined with historical price trends and recent market volatility, it is expected that in the next 1 month, the price of RED may fluctuate in the range of 0.8-1.1 US dollars. With the increase in market awareness of the RedStone project and the gradual landing of potential cooperative projects, the price is expected to break through 1.1 US dollars and move towards the range of 1.3-1.5 US dollars in 2-3 months. If the overall market situation is favorable during this period, with mainstream cryptocurrencies such as Bitcoin rising, driving positive market sentiment, the increase in the price of RED may be even greater. For example, when the price of Bitcoin breaks through a new high, the influx of funds into the cryptocurrency market increases, and investors’ enthusiasm for investing in emerging projects also rises. As a potential oracle project, RED will attract more funds and drive price increases.

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Note: The above price predictions are for reference only and do not constitute any investment advice. Cryptocurrency is highly volatile, so please be aware of the risks!

Conclusion

Looking ahead, the RedStone project has great potential in the field of oracles. With the deepening application of blockchain technology in more fields such as finance, supply chain, and Internet of Things, the demand for reliable oracle services will continue to grow. If RedStone can continue to maintain technological innovation, continuously optimize its ‘modular architecture’ and ‘on-demand fetching’ mode, further improve the efficiency and security of data transmission, expand more application scenarios, it is expected to occupy a more important position in the oracle market.