Aave, one of the largest decentralized lending platforms, has announced a new integration with Chainlink to recover value lost during oracle interactions.
The collaboration introduces Chainlink’s Smart Value Recapture (SVR) system to Aave V3 on Ethereum, aiming to bring back revenue that would otherwise be lost through maximal extractable value (MEV).
Why Aave Is Recovering MEV
In decentralized finance (DeFi), MEV refers to the profit that can be made by controlling the order and timing of blockchain transactions. A specific kind of MEV, called Oracle Extractable Value (OEV), occurs when someone takes advantage of delays in price data updates from oracles like Chainlink.
Every time a lending protocol like Aave updates prices for assets through an oracle, there’s a brief window where traders or bots can profit before others catch up. This results in lost value for the protocol and increased costs for users.
By integrating Chainlink’s SVR, Aave aims to stop this leak and redirect that value back into its own ecosystem.
How the SVR Integration Works
Chainlink’s SVR combines two key technologies:
- Chainlink’s decentralized oracle networks, which provide trusted price data.
- Flashbots’ MEV-share service, which helps manage MEV opportunities in a more transparent and fair way.
The solution is focused on back-running liquidations—where a position is closed due to lack of collateral—and ensures that this captured value goes back to the protocol. Importantly, SVR is not designed for exploitative strategies like sandwich attacks, which often harm users.
This upgrade was supported by a unanimous vote from the Aave DAO. The proposal passed with 100% approval and will be executed by March 29.
Community Response and Future Plans
Flashbots, one of the project’s key collaborators, praised the integration as a major step toward minimizing harmful MEV activity in Ethereum’s DeFi landscape. They noted that this shift could lead to more earnings for protocols and lower costs for users.
Aave’s move to adopt SVR shows how DeFi platforms are evolving to be more efficient and user-friendly. The team also hinted that more upgrades could follow as they continue working with Chainlink and other contributors.