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crypto.news 2024-12-23 18:56:30

Chainlink introduces MEV recapture solution for DeFi

Chainlink, the oracle network bringing global finance on-chain, has announced the launch of an oracle solution it says will help decentralized finance protocols recapture maximal extractable value. The Chainlink Smart Value Recapture is a MEV solution that DeFi applications can tap into to recapture non-toxic maximal extractable value from Chainlink Price Feeds. According to an announcement by the Chainlink ( LINK ) team, the initial version of its SVR is an effort contributed to by Aave ( AAVE ) DAO contributors BGD Labs and Flashbots among others. Chainlink SVR’s initial focus is DeFi lending protocols, according to Chainlink. It’s one of the solutions looking to help protocols recapture MEV from liquidations. Projects such as Chainlink, Pyth Network and API3 are at the forefront of offering solutions that enable efficiency for DeFi lending protocols. These initiatives are helping projects recapture millions of dollars worth of non-toxic MEV. You might also like: Pyth Network launches “Express Relay” to address problem of MEV SVR, built on Chainlink’s infrastructure works by allowing projects to cut needless third-party dependencies. It also removes the need for intermediary smart contracts integrations, while leveraging Flashbots for efficiency and security. This is the functionality of the Flashbots’ MEV-Share and contract architecture dubbed “Dual Aggregator”. “Based on real-world testing, we believe Chainlink SVR can expect to achieve a realistic value recapture rate of approximately 40% (i.e., for every $100 that would have been leaked via liquidation MEV, $40 was recaptured).” Chainlink Team in the blog announcement Also notably, a governance proposal for Chainlink SVR integration on Aave is ongoing. If the Aave community approves the proposal by BGD Labs, the DeFi protocol will benefit from a new revenue stream. Value recaptured by the MEV solution will thus offer Aave additional revenue as well as support Chainlink oracles’ economic sustainability. The Chainlink SVR is live on testnet ahead of its launch on the Ethereum mainnet. Chainlink developers are also eyeing a future implementation that will introduce improvements such as further decentralization, cross-chain capabilities, a DON-based auction system and gas efficiency. You might also like: Hedera taps into Chainlink’s data standard to boost DeFi and RWA adoption

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