Chainlink has introduced Smart Value Recapture (SVR), a new service aimed at helping DeFi applications recover Maximal Extractable Value (MEV) in a non-toxic manner.
SVR addresses the challenges associated with MEV, particularly Oracle Extractable Value (OEV), which often goes unrecovered in the current DeFi landscape. By facilitating the recovery of value captured by block proposers, SVR aims to return this value to the original DeFi protocols and their users.
Chainlink has outlined a revenue-sharing plan as part of the SVR initiative, with 60% of the recovered value allocated to integrated DeFi protocols and 40% to the Chainlink ecosystem. Aave, in particular, has been offered a more favorable revenue share of 65% for the first six months of their collaboration. The potential financial impact of this collaboration is significant, with estimates suggesting that Aave could see an increase in annual revenue by tens of millions of dollars. The partnership is expected to enhance user incentives and bolster Aave's revenue.
SVR is designed to address the issue of MEV captured by participants in the block-building process, providing a mechanism for value recovery that supports the integrity of DeFi protocols. The integration of SVR could be a pivotal moment for both Aave and Chainlink, setting a precedent for future collaborations within the DeFi ecosystem.