Umair
The Aave community has voted to allow the adoption of Chainlink’s Smart Value Recapture feature as the protocol looks to reclaim millions in maximum extractable value lost to oracles.
Aave (AAVE) a top decentralized finance protocol, has integrated the Smart Value Recapture on the Ethereum (ETH) mainnet. This follows an on-chain vote by the community. Chainlink (LINK) introduced the MEV recapture solution in December 2024.
With this integration, Aave and Chainlink aim to recover oracle extractable value that has previously leaked to blockchains.
SVR is thus introducing a new standard for Aave and others in the DeFi ecosystem, a way to add to network revenue. It’s also a big move for a platform to create a sustainable economic path as they tap into oracles.
The deployment is a joint effort between Chainlink and Aave-focused developer groups BGD Labs and Aave Chan Initiative, with additional input from Flashbots, a research and development platform working on solutions to the negative effects of extractable value on Ethereum.
SVR will help Aave recapture oracle-related MEV via Chainlink’s oracle networks as well as Flashbots’ MEV-Share service.
“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,” Ernesto Boado, the co-founder of BGD Labs, said in a statement.
As a start, Aave will use SVR to reclaim liquidation MEV from Threshold Bitcoin (tBTC)—the Bitcoin-backed token that allows holders to mint and use BTC on Ethereum to access DeFi opportunities. Initial support will also include LBTC, AAVE, and LINK, with more markets to follow.
Revenue from the recaptured value will be split 65% for Aave and 35% for Chainlink communities during the first six months. Chainlink plans to convert its portion of SVR fees into LINK, to be distributed to network service providers.
