The Aave community is discussing the potential integration of a new Chainlink oracle designed to redistribute yields among users. This new technology could significantly impact profit allocation from maximum extractable value (MEV) within decentralized finance protocols.
New Chainlink SVR Oracle
The SVR oracle, developed to capture profits from maximum extractable value (MEV), was released on December 23. Its purpose is to redirect profits to benefit DeFi protocols. Aave plans to add SVR to recapture MEV profits from liquidations and return them to the Aave ecosystem.
MEV Profit Redistribution
Aave plans to redirect 40% of MEV profits to users via the Aave DAO. This allows users to gain greater benefits from liquidations. Currently, third-party liquidators receive compensation for settled debts and a liquidation bonus, but the majority of profit goes to block builders, highlighting the need for system revision.
MEV Protection in Ethereum Ecosystem
Ethereum users and protocols seek protection against harmful MEV. Many users prefer to send transactions directly to validators, avoiding the public queue, to minimize transaction reordering risks and protect trades. Transactions in so-called dark pools enable direct order submission to validators.
Integrating Chainlink's new SVR oracle into the Aave ecosystem could radically change MEV profit distribution rules, bringing greater benefits to users. This significant update aims to increase transparency and reduce unjustified profits extraction by block builders.
