- Oracle resolution Express Relay, a product of Pyth Network, links top trading firms to DeFi protocols.
- According to Pyth Network, the method reduces maximal extractable value (MEV), which helps DeFi users and protocols save money.
Pyth Network PYTH -3.59%, a source of real-time market data for onchain apps, has launched Express Relay on the mainnet. It was shown on Thursday at EthCC in Brussels by Douro Labs and Pyth Data Association.
According to the oracle provider, Express Relay, which is managed by the Pyth DAO, offers a decentralized solution to the enduring maximal extractable value (MEV) issue, saving protocols and DeFi users money.
By adding, removing, and rearranging the transactions in a blockchain, the maximum value that may be obtained from block creation over the base block reward and gas fees is known as MEV.
In order to connect DeFi protocols to a network of searchers for lucrative transactions like liquidations, Express Relay uses protocol-controlled auctions. The team said in a statement provided to The Block that it can enable protocols to remove MEV, thereby lowering the cost of crucial activities like liquidation rewards—a discount given to searchers who liquidate underwater positions. According to Pyth Network, searchers are specialist actors who locate and take advantage of MEV chances. These actors include Flow Traders, Wintermute, Auros, Flowdesk, Caladan, Tokka Labs, and Swaap Finance in the context of Express Relay.
A logical development from Pyth’s primary oracle production is Express Relay. Assuming this type of MEV, it effectively tackles value extraction by intermediaries and enhances the efficiency of liquidation execution, according to Wintermute Head of DeFi Tim Wu’s comment.
According to the team, the searcher who makes the most competitive offers is granted the authority to complete the deal using Express Relay. Due to the increased ability of searchers to contend over transaction values, DeFi protocols are able to improve the incentives for liquidation rewards. It is intended to foster a more just DeFi ecosystem, resulting in higher savings for protocols that can be transferred to more fruitful endeavors or distributed to consumers.
The researchers also claimed that by aggregating liquidation and other DeFi transaction chances across several protocols and blockchains, Express Relay saves searchers time and money by removing the need to negotiate and integrate with specific protocols in order to access such opportunities.
Effective liquidations are by nature challenging to carry out. Michael Lie, Global Head of Digital Assets at Flow Traders, has announced that Pyth Express Relay has made a new protocol available to enable the efficient and successful execution of liquidations.
Synthetix, Zerolend, Ionic, Synonym, Keom, Jax Finance, Vela Exchange, and Fulcrom Finance are just a handful of the protocols that Pyth Network says have integrated or are in the process of merging with Express Relay, saving them money on the initial costs of building their own networks of searchers and liquidators.
By integrating with Express Relay, we can better offer deep liquidity for derivatives on the chain. Synthetix Core Contributor Matt Losquadro stated that by utilizing Express Relay’s auction system, Synthetix can maximize capital efficiency and expedite liquidations, hence fortifying our perpetual futures markets.
Reducing the negative consequences of MEV
Trading bots frequently use algorithms to find and seize MEV opportunities. For instance, according to data from Flashbots, a research and development group that aims to lessen the negative effects of MEV, 526,207 ETH in MEV have been removed from Ethereum since The Merge in September 2022.
MEVs provide extra incentives and contribute to market efficiency, thus they are not always a bad thing. But it also affects network costs, decentralization, and fairness. In an effort to build a more balanced blockchain ecosystem, a number of additional solutions and protocols, like fair ordering protocols and MEV auction systems, are being created to lessen the negative consequences of MEV.
Originally created for the Solana blockchain, Pyth Network currently provides real-time market data for cryptocurrencies, stocks, FX, and commodities on more than 50 blockchains, including Solana, Ethereum, Optimism, Arbitrum, and Base.
Disclaimer : This article was created for informational purposes only and should not be taken as investment advice. An asset’s past performance does not predict its future returns. Before making an investment, please conduct your own research, as digital assets like cryptocurrencies are highly risky and volatile financial instruments.
