Pyth Network has launched Express Relay on mainnet, introducing a decentralized solution to the problem of Miner Extractable Value (MEV) in DeFi transactions.
The Pyth Network provides real-time market data for blockchain applications, with a focus on bringing latency-sensitive financial data onto the chain securely and cheaply.
This new product connects DeFi protocols directly to a network of established searchers through protocol-driven auctions, eliminating the role of miners and improving market efficiency. Locators integrated with Express Relay include Flow Traders, Wintermute, Auros, Flowdesk, Caladan, Tokka Labs and Swaap Finance.
MEV issues for DeFi
MEV traditionally allows miners or validators to capture most of the value of DeFi transactions through blockspace tips. However, MEV poses some significant challenges for blockchain ecosystems, especially DeFi.
It can lead to higher transaction fees and network congestion as miners and validators compete to extract value, potentially pricing out regular users. MEV practices such as front-running and sandwich attacks can also result in unfair advantages for advanced actors, eroding trust in the system and potentially deterring wider adoption. Furthermore, the concentration of MEV extraction capabilities among a few powerful entities threatens the decentralization ethos of blockchain networks, as it can lead to the centralization of power and influence.
Finally, in extreme cases, pursuing MEV could encourage malicious behavior such as blockchain reorganizations, compromising the integrity and security of the entire network. Collectively, these issues underscore why MEV is considered a significant problem that requires careful consideration and innovative solutions to maintain the fairness, efficiency, and decentralization of blockchain systems.
How Express Relay solves MEV problems
Express Relay changes this dynamic by awarding transaction rights to the searcher with the most competitive bid and removing miners from the process. This setup encourages aggressive competition among seekers over transaction value and allows DeFi protocols to increase incentives for liquidation rewards. As a result, protocols can save money, which can be redirected to more productive initiatives or passed on to users.
Protocols such as Synthetix, Zerolend, Ionic, Synonym, Keom, Jax Finance, Vela Exchange and Fulcrom Finance, which represent a total of $1 billion in locked value across 11 blockchains, have integrated or are in the process of integrating with Express Relay to mitigate the impact of MRS. This integration significantly reduces costs associated with critical operations such as establishing liquidation awards.
Express Relay also facilitates the implementation of new protocols by providing access to an established network of seekers, reducing the need for protocols to build their own liquidator and seeker networks. It aggregates valuable DeFi transaction capabilities across multiple protocols and blockchains for seekers, streamlining access and reducing negotiation and integration costs.
The launch of Express Relay was demonstrated at the inaugural Pyth Agora 2024 Summit during the Ethereum Community Conference on July 11. The primitive is owned and operated by the Pyth DAO. Key industry figures, including Michael Lie of Flow Traders, Tim Wu of Wintermute, Matt Losquadro of Synthetix and Ryker of ZeroLend, have expressed their support and enthusiasm for the initiative.
Wu, Head of DeFi at Wintermute, said:
“Express Relay is a natural progression of Pyth’s oracle production. It ambitiously serves to reduce value extraction by intermediaries and improve the efficiency of liquidation execution, effectively addressing this form of MEV.”