The Aave community has approved the integration of Chainlink’s Smart Value Recapture (SVR) feature, marking a significant step in reclaiming millions in maximum extractable value (MEV) previously lost to oracles. This decision, made through an on-chain governance vote, reinforces Aave’s commitment to optimizing its ecosystem and strengthening its financial sustainability.
As one of the leading decentralized finance (DeFi) protocols, Aave has now deployed SVR on the Ethereum mainnet. Chainlink introduced this MEV recapture solution in December 2024, and its adoption by Aave is expected to set a new standard in the DeFi space. By leveraging this technology, Aave and Chainlink aim to recover the oracle extractable value that has historically been absorbed by block producers and other blockchain participants.
The implementation of SVR is a collaborative effort between Chainlink and Aave-focused developer groups, including BGD Labs and Aave Chan Initiative. Additionally, Flashbots, a research and development organization focused on mitigating the negative effects of MEV on Ethereum, contributed to the project.
“Optimizing liquidation algorithms on DeFi while keeping the protocols financially and technically secure is a massive endeavor,” said Ernesto Boado, co-founder of BGD Labs. “But once again, the Aave-Chainlink partnership delivers, innovating responsibly on the edge with SVR and its OEV recapturing model.”
Initially, Aave will use SVR to recover liquidation MEV from Threshold Bitcoin (tBTC), a Bitcoin-backed token that enables BTC holders to participate in Ethereum-based DeFi applications. The first phase of the rollout will also include support for LBTC, AAVE, and LINK, with additional assets to be incorporated over time.
Revenue generated from the recaptured value will be distributed between Aave and Chainlink communities, with Aave receiving 65% and Chainlink 35% during the first six months. Chainlink has announced plans to convert its portion of the SVR fees into LINK tokens, which will be allocated to network service providers.
The adoption of SVR represents a major advancement in the DeFi ecosystem, providing a blueprint for other protocols seeking to enhance revenue efficiency and capture previously lost value. As Aave and Chainlink continue to innovate, the integration of MEV recapture solutions may become a defining trend in the evolution of decentralized finance.
By Alejandro Silva Ramírez, Crypto Analyst & Columnist