Last week, industry-standard oracle platform Chainlink and FastLane, the blockchain development company behind Atlas, announced Chainlink has acquired Atlas, which now exclusively supports Smart Value Recapture (SVR), the most widely adopted Oracle Extractable Value (OEV) recapture solution.
Chainlink Community Liaison Zach Rynes, also known as ChainLinkGod on X, appeared on The Rollup with hosts Andy and Robbie to discuss how the acquisition expands SVR to new blockchain ecosystems and boosts revenue for the DeFi economy.
SVR allows DeFi applications that use Chainlink Price Feeds to recapture non-toxic OEV from liquidations. The initial version of SVR was built in collaboration with contributors to the Aave DAO, whose onchain approval preceded Aave’s official SVR integration on Ethereum last year.
Without a solution like SVR, the DeFi protocols, end users, and oracles that originally generated OEV receive none of the tens of millions of dollars worth of captured value. SVR has processed over $460 million in liquidations and recaptured more than $10 million in OEV, which provides DeFi protocols with an additional revenue stream and supports the long-term sustainability of the Chainlink Network through a revenue-share split.
“The whole point here is that DeFi lending applications have been leaking a lot of value during the liquidation process and Chainlink SVR is designed to recapture that value and return it back to the DeFi applications,” Rynes explained.
Atlas enables DeFi protocols such as Compound and Venus to recapture value by powering application-specific order flow auctions, such as for liquidations. Integrating Atlas into SVR expands SVR to new blockchain ecosystems, starting with Arbitrum, Base, BNB Chain, Ethereum, and HyperEVM, with more chains to be added in the future.
“It’s this win-win dynamic where Chainlink oracles are able to operate more sustainably because of this source of revenue, and the DeFi applications and the DAOs have a new source of sustainable revenue that they can put towards building a better lending application,” Rynes said.
“MEV bots still get paid their share, blockchains still get paid their share, but they’re not getting 99% of the liquidation value; they’re getting a more equitable amount of value for the work that they’re doing in those liquidations.”
He believes OEV functions like “liquidation plumbing” for the onchain economy.
“It’s taking something that was very extractive and leaking value to third parties who were just running liquidation scripts, to now returning it back to the infrastructure that’s actually securing the loans and facilitating the loan making process, which just seems like a more fundamentally fair deal for everyone involved.”
SVR is among Chainlink’s full suite of critical services powering DeFi as well as empowering TradFi to tokenize real-world assets that gain utility by interacting with DeFi protocols onchain.
“Tokenized assets are going to be the next megatrend of our industry – you have just an unbelievable amount of trillions of dollars to come onchain,” Rynes explained.
“This recent acquisition of Atlas – it’s focused on DeFi, but DeFi lending is in the tens of billions currently. If we’re able to bring on tokenized assets, now DeFi onchain lending can be measured in the trillions of dollars. And so the proportional value capture of the oracles and of the DeFi applications can scale with that linearly.”
Watch the full interview.