Aave and Chainlink recently joined forces to launch a new service, promoting collaboration in the DeFi space. This move not only enhances the market performance of both major projects but also brings new solutions to the liquidation mechanism. (Background: Is Ethena a systemic risk or a savior for DeFi?) (Additional context: The Trump family increases their DeFi holdings! Buying ONDO, AAVE, and ENA tokens, with holdings exceeding 80 million USD) Both leading DeFi projects Aave (AAVE) and Chainlink (LINK) saw significant rises today, but the reason is not due to the Trump concept WLFI increasing its holdings again (see (What assets might the Trump family project WLFI buy next?)), but rather the two projects collaborating on a tangible initiative, expected to help both sides generate tens of millions of dollars in additional revenue annually. According to OKX market data, as of around 11 AM Beijing time, AAVE was quoted at 377.69 USDT, with a 24-hour increase of 16.66%; LINK was quoted at 23.9 USDT, with a 24-hour increase of 5.8%. Chainlink SVR Early this morning in Beijing time, Chainlink officially announced the launch of a new service called 'Smart Value Recapture (SVR)', which is a brand new oracle solution designed to allow DeFi applications to recover MEV value in a 'non-toxic' manner through Chainlink's pricing. MEV, or 'Maximal Extractable Value', refers to the value obtained by block proposers through including, excluding, or altering the order of transactions within a specific block. As a subset of MEV, OEV ('Oracle Extractable Value') refers to the MEV generated when oracle reports are transmitted on-chain and consumed by on-chain applications. The most common OEV opportunities arise in lending protocols, particularly during the liquidation process. Note: The term OEV is actually a common misinterpretation, as it does not imply that oracles actively extract value from users, but rather refers to the MEV related to oracles. In the current DeFi execution environment, the value of MEV (especially OEV) is captured by participants in the block building process, such as searchers, builders, and validators, without returning to the original DeFi protocols, end users, and oracles that generated the MEV. If there were a way to recover these MEVs, it would help return the associated value to its original creators. This is the original intention behind Chainlink's development of SVR. From an application scenario perspective, Chainlink SVR cannot be used in controversial MEV predation scenarios such as front-running or sandwich attacks, but is specifically built for value recovery scenarios related to liquidation, addressing the OEV issues that commonly plague lending protocols. Aave Community Proposal Integration As one of the partners involved in the initial development of SVR (including BGD Labs, Flashbots, and Aave DAO), BGD Labs immediately initiated a preliminary proposal on the Aave community forum as soon as Chainlink's announcement was made, suggesting that Aave integrate SVR as soon as possible. BGD Labs pointed out that Aave's long-standing stable execution has proven the effectiveness of its liquidation mechanism, but there are also significant MEV arbitrage opportunities — in actual liquidation scenarios, builders often gain substantial profits while doing most of the work; meanwhile, searchers, or protocol users, receive a much smaller share. Chainlink's SVR is expected to effectively address this issue and more precisely define who benefits the most from transaction ordering. Due to stability considerations, BGD Labs suggested deploying SVR for only 1-3 assets in the initial pilot, advancing the integration work in a controllable manner. Potential Value Capture Scale According to Chainlink's data, after testing, Chainlink SVR is expected to achieve about a 40% actual value recovery rate — for every 100 USD of MEV leakage through liquidation, 40 USD can be recovered. Chainlink added that although some alternative solutions claim to achieve higher liquidation recovery efficiency, the team has yet to see conclusive real-world data to support this. For SVR, 40% is a conservative but realistic estimate, but actual performance is needed to gather real data. BGD Labs added that a 40% recovery efficiency corresponds to the scale of past MEV leakage, potentially achieving tens of millions of dollars in value recovery. Notably, BGD Labs also mentioned that for the sake of system simplification, the form of the assets receiving the recovered value will be ETH. Revenue Sharing Plan In Chainlink's announcement regarding SVR, it was stated that the value recovered by SVR will be distributed at a standard ratio between the integrated DeFi protocols and the Chainlink network, with 60% of the value flowing to the DeFi protocol and 40% flowing to the Chainlink ecosystem — this ratio is not fixed and may be adjusted in the future. For the first partner, in order to achieve a long-term collaboration with Aave, Chainlink proposed a revenue share of 65% to Aave and 35% to Chainlink for the first six months, but relevant data must be approved through Aave community governance. As for the final flow of value after the revenue share, Chainlink did not specify, only mentioning that 'it can support the economic sustainability of Chainlink oracles by paying transaction gas costs and other ongoing infrastructure expenses'; however, Aave has clearly proposed to use the recovered value to benefit users, such as providing incentives to stakers of the Umbrella module — which may also be one reason why AAVE's increase is more pronounced than LINK's. Related Reports VanEck's Top 10 Predictions for 2025: Bitcoin reaching a mid-term peak in Q1 next year, Solana spot ETF approval, DeFi hitting new highs... The Trump family's DeFi project invests 10 million USD in ETH, second son: Bitcoin is a better investment than real estate. Current status of Bitcoin DeFi development: How far have we come? 'Will AAVE's price hit a new high again? Chainlink's assistance may bring tens of millions of USD in additional revenue each year' was first published on BlockTempo (the most influential blockchain news media).