The Aave community has approved the integration of Chainlink’s Smart Value Recapture feature, signaling a significant step towards reclaiming millions in maximum extractable value previously lost to oracles.
As a leading decentralized finance protocol, Aave (AAVE) has implemented Smart Value Recapture on the Ethereum (ETH) mainnet following a favorable community vote. This innovative solution was originally introduced by Chainlink (LINK) in December 2024.
This new integration between Aave and Chainlink aims to recover oracle extractable value that has been historically siphoned off to blockchains.
Smart Value Recapture establishes a fresh standard for both Aave and the broader DeFi ecosystem, offering a structured approach to enhancing network revenue. This move is pivotal for creating a sustainable economic model while leveraging oracles.
The deployment is a collaborative endeavor between Chainlink, Aave-focused developer groups, and research and development teams exploring solutions to the adverse impacts of extractable value on Ethereum.
Smart Value Recapture will enable Aave to recapture oracle-related MEV through Chainlink’s oracle networks alongside relevant services, ensuring better economic outcomes.
“Optimizing liquidation algorithms in DeFi while maintaining financial and technical security is a significant undertaking. However, the Aave-Chainlink partnership consistently delivers, innovating responsibly with SVR and its OEV recapturing model,” stated a representative of BGD Labs.
Initially, Aave will leverage Smart Value Recapture to reclaim liquidation MEV from Threshold Bitcoin (tBTC)—a token allowing holders to mint and engage with Bitcoin on Ethereum for DeFi activities. Support will also extend to LBTC, AAVE, and LINK, with plans to incorporate additional markets in the future.
Revenue from the recaptured value will be distributed with 65% allocated to the Aave community and 35% to Chainlink over the first six months. Furthermore, Chainlink intends to convert its share of SVR fees into LINK for distribution to network service providers.
