Pyth Network, a provider of real-time market data for blockchain applications, has officially launched its newest product, Express Relay, on mainnet. The launch introduces a novel decentralized solution to the long-standing problem of Miner Extractable Value (MEV) in processing liquidations and market-efficiency enhancing transactions in DeFi – once thought to be an inevitable characteristic of on-chain finance.
The Express Relay primitive connects DeFi protocols directly with a network of established searchers through protocol-controlled auctions for valuable transactions like liquidations. Searchers who have already integrated with Express Relay include Flow Traders, Wintermute, Auros, Flowdesk, Caladan, Tokka Labs, and Swaap Finance.
MEV refers to how miners or validators obtain most of the value from searchers’ DeFi protocol transactions through tips for blockspace. With Express Relay, the searcher with the most competitive bids wins the right to perform the transaction. In this way, it removes miners from the equation. Searchers can then compete more aggressively over the transaction value, and DeFi protocols can increase their liquidation reward incentives. Express Relay ensures a more equitable DeFi industry, providing greater savings for protocols, which can be used for more productive initiatives or passed onto their users.
DeFi protocols using Express Relay are able to eliminate MEV, which refers to the extractive role of miners in ordering transactions, significantly reducing the costs of critical operations like setting liquidation rewards (the discount offered to searchers to liquidate underwater positions). Protocols including Synthetix, Zerolend, Ionic, Synonym, Keom, Jax Finance, Vela Exchange, and Fulcrom Finance have already integrated or started integrating with Express Relay to prevent the impact of MEV. Together, these applications represent $1 billion in total locked value across 11 blockchains.
New protocols can accelerate their deployment with Express Relay’s established network of searchers. Integrating with Express Relay enables protocols to spend less capital and resources on bootstrapping their own liquidator and searcher networks. For searchers, Express Relay aggregates liquidation and other valuable DeFi transaction opportunities across multiple protocols and blockchains. This arrangement eliminates the time and costs of negotiating and integrating with individual protocols to gain access to such opportunities.
In line with the ethos of decentralization, DeFi protocols and searchers can integrate with Express Relay in a permissionless way simply by adding a few lines of code.
Contributors to the Pyth Network from Douro Labs and Pyth Data Association publicly showcased Express Relay for the first time at the inaugural Pyth Agora 2024 summit during the Ethereum Community Conference on July 11. The Express Relay primitive is owned and governed by the Pyth DAO.
“Liquidations are inherently difficult to execute effectively. With the introduction of Pyth Express Relay, a new protocol is accessible to enable efficient and seamless execution of liquidations. Market makers such as Flow Traders can provide deep liquidity to the markets during moments of liquidation. When we seek our ecosystem partners to collaborate with, we aim to have an active role in furthering our mission to create more efficient markets. Therefore, we are thrilled to be part of this new initiative and further our engagement with Pyth, which is now many years in the making.” — Michael Lie, Global Head of Digital Asset of Flow Traders.
“Express Relay is a natural progression from Pyth’s core oracle production. It ambitiously serves to reduce value extraction by intermediaries and improve liquidation execution efficiency, effectively tackling this form of MEV. Contributing to a system where searchers and protocols interact with aligned interests furthers our mission to advance a truly decentralized world with more transparent and efficient markets. We are excited to be part of this initiative,” — Tim Wu, Head of DeFi of Wintermute.
“Integrating with Express Relay enhances our ability to provide deep liquidity for on-chain derivatives. By leveraging Express Relay’s auction system, Synthetix can streamline liquidations and optimize capital efficiency, further strengthening our perpetual futures markets. This collaboration aligns with our mission to power robust, reliable derivatives trading in DeFi.” — Matt Losquadro, Core Contributor at Synthetix.
“Zerolend is proud to integrate with Express Relay to bring MEV-free transactions to our platform. This collaboration enhances our commitment to providing a secure and efficient lending experience that passes down savings to our users.” — Ryker, Founder of ZeroLend.
This post was last modified on Jul 11, 2024, 16:20 BST 16:20