Major decentralized finance (DeFi) protocol Aave has officially integrated Chainlink Smart Value Recapture (SVR) on the Ethereum mainnet, marking a step toward reclaiming the Maximal Extractable Value (MEV) generated during loan liquidations.
The Aave DAO approved the move through an on-chain vote, which has now entered the timelock execution phase, meaning it could soon go live, according to a press release.
Developed in collaboration with BGD Labs, Flashbots, and other DAO contributors, SVR utilizes Chainlink’s oracle network alongside Flashbots’ MEV-Share service to capture liquidation-related MEV—value that previously flowed to blockchain validators.
The technology recaptures Oracle Extractable Value (OEV), a subset of MEV that occurs when undercollateralized loans are liquidated on DeFi lending protocols, according to the press release.
“Optimizing liquidation algorithms on DeFi while keeping the protocols financially and technically secure is a massive endeavor. But once again, the Aave-Chainlink partnership delivers, innovating responsibly on the edge with SVR and its OEV recapturing model,” said BGD Labs co-founder Ernesto Boado.
Historically, millions of dollars in liquidation OEV have been absorbed by block builders rather than the protocols facilitating the transactions. By leveraging Chainlink SVR, Aave aims to redirect a portion of these funds back into its ecosystem, strengthening protocol revenue while maintaining security and efficiency, the document adds.
Aave’s Initial Integration Plan
Initially, the DeFi protocol will apply SVR to select markets, including tBTC, LBTC, AAVE, and LINK, with plans for expansion. The integration follows a vote on the decentralized autonomous organization setting an initial revenue split—65% allocated to Aave and 35% to Chainlink, with an introductory six-month discounted rate.
The SVR service is also the first Chainlink-powered tool connected to Payment Abstraction, a system that converts service fees into LINK using Chainlink’s infrastructure and a decentralized exchange.
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