Uma's Oval: Fairer Profit Distribution in Defi

UMA has officially introduced Oval, a novel product designed to optimize the use of oracle data by defi protocols. This tool changes how protocols manage oracle-based MEV, enhancing efficiency and fairness in Ethereum’s blockchain profits.

Oval Launch by Uma Aims to Redistribute Profits Back to Defi Protocols

Ethereum-based oracle protocol Umaunveiledits latest product Oval today, whichUma claims“lets lending protocols capture Oracle Extractable Value by auctioning the right to liquidate positions.” The new tool is designed to enable defi protocols like lending protocols such as Aave and Compound, to more efficiently utilize oracle data.

Oval’s introduction addresses a particular subset of Maximal Extractable Value (MEV), that Uma calls Oracle Extractable Value (OEV). MEV refers to the profit that miners, validators, or searchers can make through manipulating the order of transactions in a blockchain block. MEV arises because the sequence of transactions can significantly impact the outcome of trades. Miners or validators, who have the authority to decide the order of transactions in a block, and searchers, who can find opportunities in the mempool, can profit by reordering, inserting, or censoring transactions.

For instance, they can “front-run” a large trade by placing their own transaction first to profit from the expected price movement. This manipulation can lead to higher transaction fees and potential network congestion, as users bid higher gas fees to prioritize their transactions.

热点： DEFI IN UMA