Aave, a major player in the DeFi space, is considering integrating with Chainlink's SVR service to capture MEV profits and redirect them back to users. The proposal is currently pending community approval.
By leveraging Chainlink's oracle network, Aave aims to improve its liquidation processes and create a fairer distribution of profits. The evolving block creation process in Ethereum has highlighted the need for Aave to adopt the SVR framework.
The integration could recapture around 40% of MEV associated with Aave's liquidations, potentially resulting in millions of dollars being redirected back to users. The distribution of recaptured value will be determined after a pilot phase, with an initial proposal suggesting a split of 65% for Aave DAO and 35% for the Chainlink community. This distribution is expected to shift to 60% for Aave and 40% for Chainlink to cover infrastructure costs.
The integration aims to incentivize Aave users, particularly those who stake Umbrella tokens, and enhance user engagement. Chainlink's SVR is expected to evolve into a versatile off-chain value solution, enhancing the capabilities of DeFi protocols like Aave.
Aave's native token, AAVE, has experienced a surge in value, reflecting growing investor confidence in the integration with Chainlink. The integration of solutions like Chainlink's SVR could redefine the competitive landscape in DeFi and offer new avenues for profitability. The discussions within Aave's governance forum will be crucial in determining the future trajectory of the integration and its implications for the broader DeFi ecosystem.