tl;dr
On Dec. 23, Chainlink introduced Smart Value Recapture (SVR), an oracle solution for DeFi applications to recapture non-toxic Maximal Extractable Value (MEV) from liquidations. SVR is expected to recapture about 40% of the lost value. The system creates a parallel set of Chainlink price feeds and us...
On Dec. 23, Chainlink launched Smart Value Recapture (SVR), an oracle solution designed to help DeFi applications recapture non-toxic Maximal Extractable Value (MEV) from liquidations. This initiative is a collaboration with Aave DAO, Flashbots, and others, aiming to recapture around 40% of the value lost in liquidations. SVR operates by creating a parallel set of Chainlink price feeds and utilizing the flashbots MEV-share for auctions, with a revenue split between DeFi protocols and Chainlink. The partnership deal between Chainlink and Aave involves a 65:35 split in value for the first six months. Following this announcement, Chainlink's native token, LINK, surged by approximately 9%, reaching an intraday high of $24.78. AAVE prices also saw a significant increase of more than 15%, surpassing $380 after the partnership announcement. It's crucial to note that the SVR system is anticipated to recapture about 40% of the value that would typically be lost in DeFi liquidations. This value is usually captured by third parties, but the SVR solution allows DeFi lending protocol apps to reclaim some of this lost value. The structure of SVR creates valuable economic opportunities for both communities, as highlighted by Chainlink community ambassador Zach Rynes. Additionally, Chainlink revealed that SVR will be one of the first services to integrate into the Payment Abstraction system, potentially allowing the conversion of the Chainlink Network share of the split into LINK using existing DEXs. This development sparked excitement within the crypto community, with enthusiasts expressing bullish sentiments toward both LINK and AAVE tokens. As a result of the partnership announcement, Chainlink's token experienced a 9% boost, while AAVE's token surged by over 15%. Despite their respective all-time highs in May 2021, both tokens remain down from their previous peaks, with LINK down 54% and AAVE down 43%. In conclusion, the introduction of SVR signifies a significant leap in enabling DeFi protocols to recapture lost value, leading to notable price reactions for Chainlink and Aave tokens. For more engaging content on cryptocurrencies and stock market developments, stay updated with our latest articles and reports.