Protocols Aave and Chainlink are deploying an upgrade to restore Maximal Extractable Value (MEV) on Ethereum.
Joint Integration by Aave and Chainlink
Aave and Chainlink have announced the integration of the Smart Value Recapture (SVR) service on Ethereum’s mainnet. The aim of this integration is to recover lost Oracle-related MEV during liquidation events in DeFi platforms. Approved by the Aave DAO community, the project is now in the execution phase.
Importance of SVR Deployment
The SVR, co-developed with BGD Labs and Flashbots, utilizes Chainlink’s oracle networks and Flashbots’ MEV-Share service to recapture MEV generated from liquidations. Typically, this value is taken by block builders, but the integration ensures that it returns to the ecosystem, enhancing the financial stability of DeFi platforms.
Distribution and Technical Aspects
The SVR system has been integrated into tBTC, LBTC, AAVE, and LINK markets. Over the next six months, the recaptured value will be split 65% to the Aave community and 35% to the Chainlink community. The integration also includes the Payment Abstraction system that facilitates cross-chain payments in LINK cryptocurrency.
The SVR integration between Aave and Chainlink marks a significant step towards improving the economic resiliency of DeFi platforms by ensuring value returns to the ecosystem.
