Dapp Rollup adds new use case: Oracle Engine Vulnerability (OEV) resistance service👀

Following UMA, another oracle project, API3, has launched the OEV Network, a service for resisting Oracle Engine Vulnerability (OEV).

The concept of OEV is derived from the well-known concept of Maximum Extractable Value (MEV) in the DeFi field.

MEV refers to the maximum value that block producers can earn from the transaction flow by providing sorting and final confirmation services.

The existence of MEV is a market-driven negative externality that can harm the user experience in DeFi and cause asset losses. Sometimes, these losses can even reach millions of dollars.

To mitigate the negative externality of MEV, anti-MEV protocols like FlashBot use market mechanisms to coordinate the interests of MEV Searchers, block proposers, and block builders, achieving the effect of returning over 90% of MEV to the affected parties. FlashBot is essentially an Ethereum client running an anti-MEV layer.

OEV, on the other hand, has been overlooked by the market, but statistics show that liquidation of DeFi lending protocols can lead to value leakage of up to $100 million annually.

The OEV Network launched by API3 this time draws on the design concept of FlashBot, using market mechanisms to coordinate the interests of API providers, DeFi lending protocols, and OEV Searchers to achieve resistance against OEV.

However, API3's architecture differs from FlashBot as it chooses to build a Dapp Rollup as the protocol layer based on the Polygon CDK.

The development of Dapp Rollup is truly fierce, quickly finding new use cases beyond the market consensus of Perp DEX (decentralized perpetual contract exchange) and web3 game infrastructure.

Currently, the market is still limited by the old valuation model of "fat protocol, thin application" and has not yet priced in the potential value of Dapp Rollup.

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