You know how we all hate being stuck in a queue?

Well, imagine if you could buy your way to the front.

That's exactly what's happening in the world of blockchain.

Let's dive into this fascinating concept: 🧵

Ever heard of OEV? It's value that can be extracted due to an oracle updating or not updating. Essentially, it's like being able to cash in on a market shift before anyone else. It's unprecedented in the world of blockchain.

The simplest example of OEV is liquidation. When an oracle updates, your health factor drops below one, and you get liquidated. The timing of this can be worth big bucks. We're talking $100,000 for a 1 million liquidation with a 10% penalty.

Just to give you an idea of the scale we're talking about, the biggest lending protocols like Aave, Compound, Venus have collectively lost over 300 million due to OEV. That's a lot of value just slipping away.

But here's the twist: Dapps are now looking for ways to recapture this value. And there are a bunch of solutions popping up to help them do just that.

It's a wrapper around any oracle that delays the oracle update and lets someone else auction it off. It's like buying the right to jump the queue.

@API3DAO runs oracles. They have multiple providers, maintaining a push oracle on a specific chain. Here's a fun fact: There's an artificial delay of 30 seconds, but why?

The oracle nodes are selling real-time data on L2, the OEV network. This is where the auctions come into play. You can buy the rights for specific data for a certain time.

Say you win the auction for ETH/USD on @Arbitrum. You get access to the aggregate data for one minute. And in that minute, you can update that oracle as many times as you want.

This is fantastic if you spot an opportunity. But remember, it's a bit of a gamble. You're buying a slot, not a ride. You might not get the full potential return.

Why do it this way? It's about balancing the frequency of auctions with their performance. It's better to auction the slot and let the buyer anticipate potential opportunities.

Imagine driving in France. You see two roads to go to Paris. One is a toll road, faster but you pay. The other is slower, more congested, but free. The @OEVNetwork is like the toll road.

You can use the oracles and get to your destination. Or you can pay and get there faster. It's all about options and what works best for you.

So that's the gist of API3's oracle network. It's a fascinating blend of technology and economics, providing real-time data while balancing efficiency and opportunity.

It's a bit like driving on a highway. You have different routes to the same destination. The choice is yours.

And that's the beauty of the blockchain world. It's not just about technology. It's about choices, opportunities, and the freedom to choose your own path.

#API3