The OEV Network, recently launched by API3, is a major milestone in the evolution of oracle infrastructure for securing DeFi protocols. Available on 37 networks, the OEV Network addresses the issue of maximum extractable value (MEV) in lending protocols, which has resulted in the loss of millions of dollars annually. By offering a solution to recover this value, the OEV Network not only enhances the financial viability of these protocols but also disrupts existing business models in the competitive on-chain industry.
MEV is a hidden tax that increases transaction costs, reduces profitability for liquidity providers, and impacts user experience in lending protocols. The OEV Network addresses this by creating a market for oracle transactions, allowing protocols to reverse the supply chain of MEV back to themselves, effectively sealing the leaks caused by traditional oracle infrastructure.
API3’s OEV Network is a vertically integrated MEV solution that operates seamlessly with all data sources on the network. By eliminating the “pipeline leaks” associated with oracle infrastructure, the OEV Network ensures that the value tied to price updates remains within the protocol. This not only recovers lost value but also improves data source latency when needed.
The OEV Network is the first oracle solution to create a revenue stream for the protocols it protects. By transforming value loss into financial gain, the OEV Network not only shields protocols from the negative impact of MEV but also fosters innovation. The revenue generated could lead to increased yields for liquidity providers, reduced costs for platforms, diversification of assets, and more funds for new developments, research, and public goods in DeFi.
The integration of the OEV Network will redefine the possibilities in on-chain finance. API3’s next-generation Oracle Stack not only addresses current inefficiencies but also sets the stage for growth and a more sustainable future for on-chain lending. By recovering MEV losses, the OEV Network ensures that value remains within the ecosystem, allowing for increased innovation and reinvestment in protocol systems and services.
Article Source
https://thedefiant.io/news/defi/api3-s-oev-network-transforms-lending-protocols-with-next-generation-oracle-solution