As a seasoned researcher with a deep understanding of the blockchain ecosystem, I find the development of Chainlink’s Smart Value Recapture (SVR) particularly intriguing. Having closely followed the evolution of decentralized finance (DeFi), I can attest to the significance of solutions like SVR that aim to optimize the efficiency and security of DeFi lending protocols.
Linking Chains, the worldwide on-chain financial bridge, recently unveiled a new oracle service designed to assist Decentralized Finance (DeFi) platforms in maximizing their potential 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.
As stated by the Chainlink (LINK) team, the first iteration of their SVR (Server Virtualization Runtime) was collaboratively developed by contributors from the Aave (AAVE) Decentralized Autonomous Organization (DAO), BGD Labs, and Flashbots, among others.
Chainlink SVR’s initial focus is DeFi lending protocols, according to Chainlink.
One approach is to rephrase it like this: Some solutions are being developed to let protocols regain MEV lost during liquidations in the DeFi space. Projects like Chainlink, Pyth Network, and API3 are leading the charge, providing systems that boost efficiency for lending protocols in DeFi. These efforts are helping projects recover millions of dollars’ worth of non-toxic MEV.
The Service known as SVR, constructed utilizing Chainlink’s framework, enables projects to eliminate unnecessary third-party reliances. It accomplishes this by skipping the requirement for intermediary smart contracts integrations and instead uses Flashbots for both efficiency and security. This functionality is provided through Flashbots’ MEV-Share and the contract architecture called “Dual Aggregator”.
From practical evaluations, we’re confident that Chainlink SVR will likely recover around 40 cents on the dollar (meaning, out of every $100 potentially lost due to liquidation Market Execution Value [MEV], about $40 can be regained).
Chainlink Team in the blog announcement
Also notably, a governance proposal for Chainlink SVR integration on Aave is ongoing.
If BGD Labs’ proposal is endorsed by the Aave community, the Decentralized Finance (DeFi) protocol could gain a fresh income source. The earnings generated from this Mechanized Execution of Value (MEV) solution would not only boost Aave’s own income but also contribute to the economic resilience of Chainlink oracles.
The Chainlink Service Verification Rate (SVR) has been activated on the test network in preparation for its upcoming debut on the Ethereum primary network. The Chainlink team is also contemplating future enhancements, which may include more decentralization, cross-chain functionality, an auction system based on DON, and gas optimization.
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2024-12-23 22:07