Weekend Market Gaps Can Increase Arbitrage Risks

Tokenization of Real World Assets and Risks

According to RedStone, the increase in the tokenization of real world assets (RWA) overlooks an important risk: the 'weekend gap' between the 24/7 operation of crypto markets and the closing of traditional markets on weekends. This situation can lead to 'price discrepancies' between on-chain and traditional markets, potentially resulting in losses or arbitrage opportunities.

The Importance of Oracle Providers

In particular, the interruptions in price flows from oracle providers during the weekend further exacerbate this issue. This highlights the need for more robust oracle architectures to manage the gap between open protocols and closed traditional markets.