[VRC] Venus x Chainlink SVR Integration Proposal

Hi everyone, Raoul Schipper from Chainlink Labs here. We are proposing to the Venus community the integration of Chainlink Smart Value Recapture (SVR) on BNB Chain, to recapture oracle-related liquidation MEV (Oracle Extractable Value, “OEV”) that currently leaks to third parties. SVR converts that leakage into a recurring revenue stream for the Venus DAO, while preserving permissionless liquidations and supporting an open searcher ecosystem.

What This Proposal Does

  • Adds SVR to Venus on BNB Chain to recapture liquidation-related OEV and share proceeds with the Venus DAO.
  • Builds on the existing Venus ↔ Chainlink relationship by extending how price updates are delivered (without changing the core liquidation design).
  • Starts a bigger collaboration chapter: a mutually beneficial commercial relationship that can expand into next-wave growth areas like RWAs and new top-tier assets

Motivation and key benefits

Integrating Chainlink SVR presents a sizable value capture opportunity for the Venus protocol and its community; with the potential to use this value as an additional revenue source and leverage to grow the protocol. Based on onchain data from Aave V3 and Compound V3, SVR recapture rates can reach 50% and beyond of the liquidation bonuses paid out based on the growth of the searcher ecosystem.

To date, Chainlink SVR has successfully processed over $480 million in user liquidations and recaptured over $10M in OEV, even during the most extreme market volatility such as October 10th. SVR is the most robust and widely adopted OEV recapture solution on the market, actively securing over $40B in lending protocol deposits. Notably, SVR is built on-top of the same exact oracle infrastructure that secures 70% of DeFi, and which has a more than half-decade track record of protecting the DeFi economy against oracle exploits and manipulation.

SVR supports an open searcher ecosystem via competitive bidding. The same searchers who liquidate on Venus today can integrate and continue doing so, now in a way that is more beneficial to Venus.

In this proposal, we provide a background on Chainlink SVR, how it works, and details relevant for this integration.

Chainlink & Smart Value Recapture Background

With ~70%+ market share in DeFi by Total Value Secured, Chainlink is the most widely adopted oracle platform in DeFi, actively securing tens of billions of dollars in user deposits across hundreds of independent applications across dozens of blockchains. Achieving this level of scale is only possible by ensuring security and reliability are always our main priority, a principle we do not and will not compromise on.

This same level of rigor was applied to the research and development behind Chainlink SVR, a novel OEV recapture solution that enables users of Chainlink Price Feeds to recapture non-toxic liquidation MEV. Notably, SVR stems from over half a decade of rigorous academic R&D performed by Chainlink Labs into oracle-based MEV mitigation infrastructure, including Fair Sequencing Services (FSS) and Protected Order Flow (PROF).

Additionally, SVR is built upon the same decentralized oracle network (DON) infrastructure that powers Chainlink Price Feeds, meaning it benefits from a time-tested architecture and introduces little to no additional trust assumptions for existing Price Feeds users.

Since launching into production in March 2025, SVR has quickly become the largest and most widely adopted OEV recapture solution on the market, powering deployments on Aave V3 across Ethereum, Base, and Arbitrum, as well as a majority of Compound’s Ethereum markets, securing over $2 billion of TVL without materially affecting the protocol’s risk profile.

SVR has processed thousands of liquidations, encompassing nearly $17 million in liquidation bonuses and recapturing over $10 million in value.

Below we briefly describe how Chainlink SVR operates. For a more detailed description of SVR, please refer to the original announcement, follow-up research, and the official documentation.

Chainlink SVR Overview

Smart Value Recapture (SVR) is an extension of Chainlink Data Feeds, enabling DeFi protocols to recapture non-toxic, oracle-related MEV (e.g., liquidation MEV). SVR has been designed such that it can only be used to backrun liquidations and cannot be used for frontrunning, sandwich attacks, or other forms of toxic MEV. The initial version of SVR was built in collaboration with BGD Labs, Flashbots, and other key contributors. SVR is modular and future-proof in its ability to leverage multiple Order Flow Auction (OFA) providers; on BSC, Chainlink has selected an OFA provider for SVR that is well-suited to the nuances of the BSC network and MEV supply chain.

By using established OFA providers, SVR is able to support an open and decentralized searcher ecosystem. This helps ensure competitive bidding and market-driven recapture rates, as opposed to closed or single-searcher models, which can artificially inflate recapture rates and introduce single points of failure.

Notably, SVR’s open approach is aligned with Venus’ goal of having a permissionless, decentralized liquidation process, where any account address can liquidate eligible positions. The same searchers who facilitate liquidations on the Venus protocol today can integrate with SVR to continue supporting the protocol’s solvency.

Chainlink SVR Overview

Integration Process and technical details

Integrating Smart Value Recapture (SVR) into Venus’s Resilient Oracle architecture is straightforward, as it already uses Chainlink as a core price source with fallback protections designed to reduce oracle-related risk. The upgrade is as simple as updating the current Data Feed address to point to a new SVR-enabled Price Feed address for each desired market, meaning no required changes to Venus’s core smart contract code.

Chainlink Labs will work in close coordination with the Venus Core engineering teams and the risk management function to securely configure all market-specific oracle feeds, including parameterization, validation, and failover settings, and to perform deployment verification and continuous monitoring of the dual-aggregator contracts.

Recaptured OEV will be distributed between Venus and the Chainlink Network, with fees sent automatically to the Venus DAO treasury address 0xf322942f644a996a617bd29c16bd7d231d9f35e9.
Distributions can be made on a weekly basis if there are recaptures.

Proposed Integration Timeline

Following a successful governance approval, the implementation of SVR on Venus can progress swiftly according to the following estimated timeline:

  • Proposal finalization (End of January): Vote and decision by the DAO to move to implementation phase.
  • Go-live & monitoring (End of February): Based on Venus DAO’s input and service provider support, a governance proposal and vote to update price feed addresses to SVR feed addresses.
  • Continuous monitoring and improvement (March): Comprehensive testing and monitoring of SVR feeds. Continuous monitoring and performance tweaks; Regular payments and informing of the Venus DAO of recaptured OEV.
  • Further integration expansion (Post end of March): Expansion of SVR across more chains upon approval and alignment with the formal DAO governance process.

Powering Venus growth

The Venus and Chainlink communities have a long-standing partnership that dates back to DeFi summer in 2020. Since then, the Chainlink Network has been a critical infrastructure partner for Venus, forming a key piece of the resilient oracle architecture model that has weathered periods of rapid growth and volatility.

This support has extended beyond baseline services to include bespoke oracle enhancements such as customizing performance characteristics to meet Venus’s use case requirements, including heartbeat intervals and deviation thresholds. Building on this proven foundation, the partnership can now evolve with a next-generation approach to price oracle architecture, unlocking a new ongoing revenue stream for Venus and its community.

The Chainlink SVR implementation on Venus brings a new growth engine for Venus. By deepening the architectural alignment between Venus and Chainlink, Venus can accelerate adoption, deepen liquidity, and amplify market presence across ecosystems. Chainlink’s proven multichain footprint provides Venus with a scalable, future-proof platform that enables rapid deployment and growth across blockchain ecosystems, without fragmenting liquidity or introducing unnecessary security assumptions.

Beyond scale, this collaboration positions Venus at the forefront of the next major growth wave in DeFi: tokenized real-world assets (RWA). Chainlink is uniquely positioned as the connective tissue of the onchain economy, already securing and standardizing the data, interoperability, privacy, and compliance layers required for institutional-grade RWA adoption with the likes of Maple, xStocks, Ondo utilising Chainlink’s infrastructure. By integrating with Chainlink, Venus can seamlessly unlock RWA-backed markets, enabling new collateral types, higher-quality yield, and deeper participation from both crypto-native and institutional capital. SVR, by providing a better liquidator experience, uniquely helps unlock RWAs by making liquidity easier to access for onchain lending markets. For this reason, we view SVR as a critical piece of infrastructure for lending protocols to adopt in order to benefit from the adoption of RWAs.

Together, Chainlink and Venus form the end-to-end stack: Chainlink provides the trusted data, cross-chain interoperability, and compliance-ready infrastructure, and Venus delivers capital efficiency and lending markets at scale. This partnership expands Venus’s reach and positions the protocol as a core DeFi venue for the institutional tokenized asset economy, right as trillions of dollars in real-world value moves on-chain.

Disclaimer

Chainlink Labs’ contributions under this proposal are provided “as is” without representations, guarantees, or warranties of any kind, on a commercially feasible basis. These contributions are made expressly subject to Venus DAO having accepted, and agreeing to be bound by, the Chainlink Labs terms of service (“Labs Terms”) and the Chainlink Foundation terms of service (“Foundation Terms”). The benefits described in the proposal are provided exclusively to the Compound Protocol as a whole, and not to any other party. By approving this proposal, Venus DAO shall be deemed to have accepted the Labs Terms and Foundation Terms, each as may be amended from time to time.

References and documentation

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