Chainlink, the oracle network that provides global on-chain finance, has announced the launch of an oracle solution that it says will help DeFi protocols recover maximum extractable value.

Chainlink Smart Value Recapture is a MEV solution that DeFi applications can leverage to recover maximum non-toxic extractable value from Chainlink price feeds.

According to advertisement By Chain Link (connection), the initial release of its SVR is an effort to which Aave contributed (ghost) DAO contributors to BGD Labs, Flashbots and others.

The initial focus of Chainlink SVR is DeFi lending protocols, according to Chainlink.

It is one solution that seeks to help protocols recover MEV from liquidations. Projects like Chainlink, Pyth Network, and API3 are at the forefront of providing solutions that enable the efficiency of DeFi lending protocols. These initiatives help projects recover millions of dollars' worth of non-toxic EVs.

Built on Chainlink's infrastructure, SVR works by allowing projects to cut off unnecessary third-party dependencies. It also eliminates the need for intermediary smart contract integration, leveraging Flashbots for efficiency and security. This is Flashbots' MEV-Share function and a contract structure called "Dual Aggregator".

“Based on real-world testing, we believe Chainlink SVR can expect to achieve a realistic value recovery rate of around 40% (i.e., for every $100 that would have been leaked via MEV liquidation, $40 was recovered).”

Chainlink team in blog announcement

It is also worth noting A Governance proposal The integration of Chainlink SVR on Aave is still ongoing.

If the Aave community approves BGD Labs’ proposal, the DeFi protocol will benefit from the new revenue stream. The value recovered by the MEV solution will therefore provide Aave with additional revenue as well as support the economic sustainability of Chainlink oracles.

Chainlink SVR is live on the testnet before launching on the Ethereum mainnet. Chainlink developers are also looking forward to a future implementation that will offer improvements such as more decentralization, cross-chain capabilities, a DON-based auction system and gas efficiency.