Aave has integrated Chainlink Smart Value Recapture (SVR) on Ethereum Mainnet, a pivotal step toward reclaiming millions in oracle-related Maximal Extractable Value (MEV) previously lost to blockchain networks.
The integration was approved via an Aave DAO governance vote, and a sustainable revenue-sharing model was introduced between the two partners.
The partnership also includes a 3-month exclusivity period, during which Aave will use Chainlink exclusively for SVR, and Chainlink will prioritize Aave’s ecosystem.
Aave and Chainlink Collaboration
Aave and Chainlink have had a long-standing partnership that has secured over $75 billion in DeFi Total Value Locked (TVL) and facilitated over $20 trillion in transactions. Moreover, SVR was co-developed by the Aave Chan Initiative, BGD Labs, and FlashBots, emphasizing security and efficiency.
The SVR architecture addresses two main challenges: revenue leakage and protocol security.
Revenue leakage unlocks a new income stream for Aave by recapturing Oracle Extractable Value (OEV), estimated at ~40% of MEV profits historically lost. Furthermore, Chainlink’s battle-tested oracles mitigate risks like frontrunning and data manipulation.
How SVR works and the Future Roadmap
Previously, Oracle Extractable Value (OEV) was captured by block builders, leaving DeFi protocols and oracle providers uncompensated. However, by utilizing the SVR, DeFi protocols can recapture this value.
SVR uses Chainlink’s decentralized infrastructure and Flashbots’ MEV-Share service to redirect Oracle Extractable Value (OEV) back to Aave and Chainlink.
The three key features of the integration are initial markets, revenue split, and payment abstraction.
If SVR data is delayed, the system uses a “Dual Aggregator” contract architecture to ensure fallback security, defaulting to standard Price Feeds.
In the future, Chainlink plans to enhance SVR with increased decentralization, gas efficiency improvements, and cross-chain functionalities via CCIP.
Adding these upgrades could expand SRV’s applicability to diverse multi-chain DeFi environments, further amplifying revenue potential.
Additionally, despite the promising initiative, there are concerns that require addressing, including dependency on flashbots, gas costs, and governance dependence.
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