The Aave community has approved the implementation of Chainlink’s Smart Value Recapture feature, aiming to recover millions in maximum extractable value that oracles have previously siphoned away.
Aave (AAVE), a leading decentralized finance protocol, has successfully integrated the Smart Value Recapture on the Ethereum (ETH) mainnet following a community vote. Chainlink (LINK) introduced this MEV recapture solution back in December 2024.
Through this integration, Aave and Chainlink aim to reclaim oracle extractable value that has previously been lost to various blockchain systems.
The introduction of SVR establishes a new benchmark for Aave and other platforms within the DeFi landscape, providing a mechanism to enhance network revenue. This also marks a significant step toward fostering a sustainable economic structure by leveraging oracles.
This deployment is a collaborative effort between Chainlink and developer groups focused on Aave, namely BGD Labs and the Aave Chan Initiative, with contributions from Flashbots, a research entity dedicated to addressing the adverse impacts of extractable value on Ethereum.
SVR will enable Aave to recapture MEV related to oracles through Chainlink’s oracle networks and Flashbots’ MEV-Share service.
“Enhancing liquidation algorithms in DeFi while ensuring the financial and technical security of protocols is a significant challenge. Yet, the partnership between Aave and Chainlink continues to innovate responsibly with SVR and its OEV recapturing model,” remarked Ernesto Boado, co-founder of BGD Labs.
Initially, Aave will utilize SVR to recover liquidation MEV from Threshold Bitcoin (tBTC)—a Bitcoin-backed token enabling holders to mint and use BTC on Ethereum for DeFi opportunities. The first wave of support will also include LBTC, AAVE, and LINK, with plans for more markets to come.
Revenue generated from the recaptured value will be allocated with 65% going to the Aave community and 35% to Chainlink’s community during the first six months. Chainlink intends to convert its share of SVR fees into LINK for distribution to network service providers.