Aave community have approved using Chainlink Smart Value Recapture feature to recover millions in maximum extractable value that oracles have lost.
The Ethereum mainnet now has Smart Value Recapture integrated by Aave, a leading decentralized finance protocol. The community’s on-chain vote came after this. Chainlink unveiled the MEV recapture solution in December 2024.
Aave And Chainlink Smart Value Recapture Integration
This integration between Aave and Chainlink aims to recover Oracle extractable value previously leaked to blockchains. Therefore, SVR offers Aave and other DeFi ecosystem participants a new standard to increase network revenue. It’s also a significant step for a platform to use oracles to develop a sustainable economic path.
With additional help from Flashbots, a research and development platform focusing on solutions to mitigate the adverse effects of extractable value on Ethereum, the deployment is a collaborative effort between Chainlink and Aave-focused developer groups BGD Labs and Aave Chan Initiative.
Using Chainlink’s oracle networks and Flashbots’ MEV-Share service, SVR will assist Aave in recapturing oracle-related MEV.
Aave To Optimize DeFi Algorithm
Ernesto Boado, a co-founder of BGD Labs, said that optimizing liquidation algorithms on DeFi while maintaining the protocols’ technical and financial security is a huge undertaking. But with SVR and its OEV recapturing model, the Aave-Chainlink collaboration delivers once more, innovating responsibly on the edge.
To access DeFi opportunities, Aave will first utilize SVR to recover liquidation MEV from Threshold Bitcoin (tBTC), the Bitcoin-backed token that enables holders to mint and use BTC on Ethereum. Additional markets and LBTC, AAVE, and LINK will be added later.
For the first six months, Aave and Chainlink communities will split the revenue from the recaptured value at 65% and 35%, respectively. Chainlink intends to turn its share of SVR fees into LINK, which it will give to network service providers.
