OEV Innovation Clearing Mechanism Oracle Machine Leads DeFi Efficiency Upgrade

The development of Oracle Machine technology is revealing some of the essence of the Blockchain world.

Although most people are quite familiar with MEV (Miner Extractable Value), OEV (Oracle Machine Extractable Value) is relatively unknown. Both concepts reflect a common principle: those who have additional information often can gain extra benefits, but as the number of informed individuals increases, these benefits tend to be diluted.

Taking the liquidation mechanism of a decentralized lending platform as an example. To incentivize third parties to participate in liquidation, the platform usually offers a certain proportion of liquidation rewards. This is essentially a risk-free opportunity, with the costs borne by those who failed to timely replenish their margin and faced liquidation.

However, over time, the competition for this opportunity has become increasingly fierce. From initial hourly manual operations, to minute-level script order grabbing, and then to second-level robots competing for on-chain priority by burning Gas fees. The result of the Gas War is that most of the profits ultimately flow to miners or validation nodes, while the robots that actually execute the settlements can only share a small portion.

To further enhance efficiency, competition has extended to the Oracle Machine level. After all, the Oracle Machine is the first to know about asset price changes, and its data directly determines whether a liquidation is triggered.

Some emerging Oracle Machine services have launched innovative features that advance competition from seconds to milliseconds. They first conduct small auctions off-chain, with the highest bidder gaining the right to settle. The entire process takes only about 300 milliseconds.

More importantly, these services package the Oracle Machine data updates, clearing execution, and reward distribution into a single atomic transaction, completed within the same Block. This design cleverly utilizes the time characteristics of Blockchain, ensuring the fairness and efficiency of the clearing process.

This innovation not only significantly enhances the settlement speed but also optimizes the profit distribution mechanism. The profits captured by OEV can be reasonably distributed among the protocol, Oracle Machine, and liquidators, achieving a win-win situation for all parties involved. This design is expected to be widely adopted, promoting the further development of Oracle Machine and the DeFi ecosystem.