21min chapter

Bankless cover image

Hasu & Hart on Oval & The Recapturing of Billions in DeFi Liquidations

Bankless

CHAPTER

MEV and Liquidations in DeFi Protocols

This chapter explores the concept of Miner Extractable Value (MEV) within Aave and Compound protocols and how it is triggered by Chainlink price updates and liquidations. It discusses the implications of MEV capture, the potential consequences if left unaddressed, and the different approaches taken by lending markets in managing bad debt. The chapter also examines the trade-off in the Maker Design and the importance of a decentralized validator layer in the context of MEV.

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