Pyth Network a decentralized oracle solution that provides real-time market data for blockchain applications. Its primary focus is securely and inexpensively bringing latency-sensitive financial data on-chain. In this way, Pyth Network lets DeFi protocols and applications get accurate and up-to-date price feeds, which makes them more useful and reliable. They recently introduced a new feature Express Relay to address the issue of Miner Extractable Value (MEV) in DeFi transactions.
About Express Relay
Express Relay is a decentralized solution introduced by Pyth Network to address the issue of MEV in DeFi transactions. Pyth Network itself provides real-time market data for blockchain applications, with a focus on securely and inexpensively bringing latency-sensitive financial data on-chain.
The MEV Problem
Miner Extractable Value (MEV) refers to the extractive role of miners in ordering transactions. In critical operations like setting liquidation rewards (the discount offered to searchers to liquidate underwater positions), MEV can significantly increase costs for DeFi protocols. Essentially, miners can front-run transactions, manipulate order execution, and extract value from the system.
How Express Relay Works
Express Relay integrates directly with searchers, allowing protocols to auction off valuable transactions (such as liquidations) to a network of top searchers. Here’s how it works:
- Eliminating MEV: By connecting protocols and searchers, Express Relay reduces miner interference and ensures private auctions between them. This escape from the “dark forest” secures users’ transactions from MEV attacks.
- Searcher Network: Top searchers process transactions on Express Relay, creating a competitive environment. Integration is permissionless, enabling more searchers to join and compete for transaction opportunities.
- Accelerated Deployment: Protocols can launch and scale faster by leveraging Express Relay. Reliable liquidations and competitively priced transactions are readily available.
Case Study: Liquidations with Express Relay
Express Relay shares the liquidation value between the protocol and the searcher with the most competitive bid. Traditionally, protocols discount their collateral significantly to ensure reliable liquidations, but most of the value ends up benefiting miners. With Express Relay, protocols regain control over their value, reducing losses due to MEV.
Testimonials from the Ecosystem
- Tim Wu, Head of DeFi at Wintermute: “Express Relay ambitiously serves to reduce value extraction by intermediaries and improve liquidation execution efficiency, effectively tackling MEV.”
- Matt Losquadro, Core Contributor at Synthetix: “Integrating with Express Relay enhances our ability to provide deep liquidity for on-chain derivatives.”
- Zerolend: “Proud to integrate with Express Relay to bring MEV-free transactions to our platform.”
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