Millisecond-level End to Gas War: How RedStone Atom Atomic Transactions Reshape OEV Capture?

The more I look at the Oracle Machine, the more I feel a sense of approaching the essence.

Many people are familiar with MEV, but not many know about OEV.

The so-called MEV, according to previous terminology, is Miner Extractable Value; while OEV refers to Oracle Extractable Value.

There are two rules: Those with extra information can always gain extra profits; however, the more people who know the extra information, the thinner the profits will be.

For example, in the liquidation of AAVE, the protocol encourages third parties to perform the liquidation by offering them a liquidation reward, such as 10% of the liquidation amount.

This is basically a risk-free business, and those who pay for it are either broke or have forgotten to top up their margin.

So can you imagine how things would develop in a public and profitable opportunity? At first, it was at the hourly level, waiting for a person to manually settle; then, it became at the minute level, using scripts to compete for order speed; finally, it reached the second level, where robots had to rely on burning Gas War to seize the right to be prioritized on-chain.

The result of the Gas War is that these robots must pay more than 90% of the amount to the miners in order to compete and win a small share.

Of course, the miners (nodes) are the happiest, lying down doing nothing, not even having to bear the blame of being a liquidation vulture, comfortably accepting 90% of the income with a smile.

However, where there are people rolling in, there are those rolling even harder. When it comes to the second level, it's still not enough, so the battle has spread to the Oracle Machine level.

Everyone thinks about it and realizes that the first to see the liquidation information is actually the Oracle Machine. After all, if the Oracle Machine says you are liquidated, then you are truly liquidated. If the Oracle Machine doesn't say you are liquidated, you might not even be liquidated.

For example, suppose Alice's Ethereum price is 2999, and if the Oracle Machine raises the price by an inch, forcing it to report 3000, and then Ethereum happens to reverse at an integer point V, it might just save Alice's position.

So, how did this competition move from seconds to milliseconds? For example, taking the newly released Atom feature from RedStone as an example.

In the same scene of bankruptcy liquidation, it can send the Oracle Machine data off-chain first and conduct a small off-chain auction.

As for the liquidator, they directly handle it off-chain, and no longer need to engage in Gas War, the highest bidder wins, roughly 300 milliseconds.

After each auction ends, Atom is directly submitted to the smart contract based on the bid amount (bypassing public channels).

Moreover, its smart contract is quite interesting as it bundles three operations into a single atomic transaction:

1. Update the signature Oracle Machine price;

2. Execute clearance;

3. Transfer the winning amount to the designated recipient.

Due to the settlement of three operations within the same block, the Oracle Machine updates and settlements are directly bound and indivisible, thus eliminating the possibility of other liquidators seeing the information on this chain and immediately copying it to preemptively liquidate.

This operation of binding three transactions together on the chain is indeed quite clever, but upon reflection, this is standard blockchain thinking—the concept of time in the blockchain world is not linear, but rather measured in blocks as the smallest unit, for example, Ethereum is 12 seconds.

Theoretically, these three transactions occur simultaneously, so no one can insert any transactions into them; it has reached the end of the matter.

So, this OEV war, after RedStone Atom, directly shifted from seconds to milliseconds, reaching the finish line of the competition in one step. When you start running at the finish line, it is meaningless for others to try to rush ahead no matter what.

Moreover, because this settlement is done off-chain, it might be even faster for the protocol compared to the past.

The profits captured by OEV can also be fed back to the protocol, the Oracle Machine itself, and the liquidators, benefiting all three parties. I believe that promoting this will also encounter the least resistance, which is a great design.