Each year, Maximum Extractable Value (MEV) bots occupy millions of people from front-running transactions, or in some cases liquidation events. For example, the recent frontrunning of Ross Ulbricht, which forced Ross prices, may demand that, but they could be worth it in some examples too. For example, during a curve hack, the exploit was first taken by the bot. The bots then acquired a significant portion of the stolen funds. Eventually, the funds were reverted to the curve.
MEV bots continue to run in major chains such as Solana and Ethereum, becoming a “broad problem.” Here, the baritter can process transactions that are willing to pay a higher fee rather than the original posted. With millions of people being sucked up by these bots, ChainLink is publishing a strategic plan that will at least help alleviate this issue.
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ChainLink has a MEV plan: Does it work?
In the post, ChainLink, a leading Oracle provider, said the new Smart Value Recapture (SVR) initiative can store Defi protocols, particularly lending platforms like Aave.
SVR helps these lending protocols recapture values that would otherwise be absorbed by third-party bots. It promotes “economic sustainability” by easily returning value to the protocol or its users once implemented.
But how does it work?
ChainLink said the explainer said SVR utilizes a dedicated Oracle solution that seamlessly integrates infrastructure with Flashbots' MEV sharing system. Flashbots is a platform that aims to reduce the negative impact of MEV on Ethereum-based protocols.
It also introduces “dual aggregator” functionality to increase transaction ordering efficiency while minimizing the need for external dependencies.
Their testing revealed that SVR allowed the lending Defi protocol to recapture approximately 40% of the lost value to the liquidation MEV bot.
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Liquidation vs. Normal MEV Bots
To be clear, it should be known that liquidation MEV bots often aim to extract value from liquidation events on Defi Lending platforms such as Aave and Maker, for example.
In many cases, when the price is a tank, the lending protocol forces the collateral to be sold at market rates to protect the lender. The liquidation MEV bot uses this drop to manipulate liquidation timing and allow you to purchase assets at a discounted price.
Regular MEV bots ramping on Solana and Ethereum can benefit from the expected price movement, especially if orders are large. You can also launch a sandwich attack that combines front and back running.
Impact of SVR on DEFI: Will links rise?
Given what this solution brings to the table, the Aave community search This option.
If they adopt it, Aave could increase revenue by acquiring value that would otherwise be lost to third parties. Additionally, there is a more fair liquidation, and those who purchase liquidated assets will acquire them with a fair valuation.
Ultimately, the success of SVR depends on whether Ethereum's Defi protocol adopts this solution. The more you do it, the higher the native tokens of your chain links.
At the time of pressing, the link is under pressure, but the upward trend for the fourth quarter of 2024 remains.
To be in charge, the buyer must refuse attempts to drive a coin with a link below $18 and a February low.
Post ChainLink has a Defi plan to minimize the impact of MEV bots. Does it work? It first appeared in 99 Bitcoin.
