Reference → OEV NetworkOEV Network
The OEV Network is an open marketplace designed to facilitate the distribution of oracle updates. Operating on an optimistic-rollup, the system ensures transparency and verification of transactions. In this marketplace, OEV searchers place bids for the exclusive opportunity to update a specific dAPI within a short window of time. This timing allows them to extract value, especially if the dAPI’s data indicates a price that could lead to a profitable action before the next scheduled update.
The auctions conducted on the OEV Network aim to ensure that the value extracted by searchers is shared with the dApps responsible for creating these opportunities, rather than being monopolized by validators through competitive bidding.
An auction on the OEV Network signals two things: a dAPI's data suggests a potentially valuable action (such as a liquidation in a lending dApp) that has not yet been reflected on-chain, and an update (either scheduled or triggered by significant price deviations) has not yet occurred. By facilitating updates through this auction system, the OEV Network enhances the accuracy and responsiveness of dAPIs, ensuring that updates are made when most needed.
Winners of OEV auctions must include their payment within the transaction that updates the data feed, ensuring immediate value return to the dApp, the data providers, and the creators of the dAPIs and the OEV Network itself, API3. This approach not only improves the efficiency of oracle operations but also distributes the extracted value more equitably among participants.
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