DeFi growth boosts oracle market competition — RedStone co-founder

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As decentralized finance (DeFi) continues to grow, the demand for oracles — key tools that connect blockchains to real-world data — is surging.

Established providers such as Chainlink face increased competition from emerging players as decentralized applications (DApps) require more efficient data delivery solutions.

Marcin Kaźmierczak, co-founder and chief operating officer of RedStone, discussed trends in DeFi oracles in an exclusive interview with Cointelegraph.

Kaźmierczak said the oracle market is entering a new phase driven by innovation and multichain adoption, highlighting the rapid changes in DeFi and the potential shakeup of oracle providers.

Scaling a multichain ecosystem

Kaźmierczak noted that the rise of layer-2 networks and non-Ethereum Virtual Machine (EVM) chains, such as The Open Network (TON) and Starknet, has exposed scalability limitations in existing oracle designs.

“When Chainlink was created, there was no such thing as L2 or DeFi on multiple L1s, therefore, the design wasn’t optimized for multichain delivery.”

Kaźmierczak said each new network presents “a big dependency and technical cost” that was not accommodated initially, but this demand has revealed new “challengers.”

The RedStone co-founder described these newcomer networks as “far more efficient in supporting new ecosystems” and included the likes of Berachain, Unichain (Uniswap’s L2 network) and Ink (Kraken’s L2 network).

Decentralizing without over-engineering

The question of how oracles should be decentralized is a topic that continues to be discussed, with some experts, such as Flare Network’s co-founder Hugo Philion, advocating for embedding oracles directly onchain.

Kaźmierczak voiced concerns about the embedding approach, which he claimed “at the base layer, stifles innovation and locks protocols into specific designs.”

He argued that a better and more efficient path could be made by leveraging staking technology and distributing security risks while allowing oracles to remain independent and adaptable to technological changes.

Outlook for Oracles

While acknowledging that Chainlink remains a powerful force with deep — and growing — industry roots, Kaźmierczak reiterated that the fast-paced nature of DeFi leaves room for challengers.

“We are not so much obsessed with being first, as we are with delivering value to clients and constantly growing,” he said, adding that the oracle provider’s total value secured (TVS) has grown “1,250% year-over-year, now reaching $6.3 billion.”

With expectations of crypto-friendly policies under the incoming administration of United States President-elect Donald Trump, the RedStone co-founder told Cointelegraph that he expects a “bullish wave across DeFi platforms.”

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