Oval launched on Morpho mainnet markets in May. Oval recaptures OEV that is otherwise leaked to the MEV supply chain on Morpho liquidations and returns the funds to market lenders. For more on how Oval and how it is integrated on Morpho markets, please see the original forum post. Below is a summary of Oval’s performance to date.
Deployed Markets
Oval is deployed on 3 markets to date with more in development. The markets have been deployed by Re7 and Gauntlet and use Chainlink and RedStone price feeds. Below is a summary of the markets. Please see our Dune dashboard for live information.
| Market | Oval Captured Liquidations | Collateral Liquidated | OEV Recaptured | OEV Redistributed | Oval Bonus Rewards |
|---|---|---|---|---|---|
| wstETH/USDT | 11 | $141,607 | $2,085 | $2,085 | +8.46% |
| pufETH/USDC | 3 | $39,752 | $1,223 | $1,223 | +0.40% |
| tBTC/USDC | 1 | $196,256 | $5,194 | ||
| SUM | 15 | $377,615 | $8,502 | $3,308 |
The Oval rewards shown above started on August 9th and will run until September 7th. On that date a new cycle of Oval rewards will begin with all accrued OEV, including the already recaptured tBTC/USDC, being distributed over the next month.
OEV Recapture Rates
The UMA team has been working closely with liquidators and sponsoring liquidations to help liquidators successfully submit liquidations through Oval. There have been a total of 24 liquidations of Oval-enabled markets and 15 have been captured through Oval with OEV recaptured, although searcher adoption has improved over the last 2 months with 14 of the last 17 liquidations being captured for a liquidation capture rate of 82%. On those 17 liquidations, Oval has captured 37% of the liquidation bonuses paid to liquidators.
These are good initial rates and the UMA team is working to continually increase searcher adoption. We expect both of these rates to be over 90% as liquidator adoption continues and increased total borrows on Oval enabled market increases liquidator competition.
Block Delays
All Oval captured liquidations have been executed within the same block as the price update creating no liquidation delay. The Oval auction period has been set to 2 blocks after a new price update. After the auction period expires the new price is released to the market and are available for liquidations as if Oval did not exist on the market. Liquidations that were not executed through Oval have at times been executed immediately after the auction period resulting in a 3 block delay. Other times these block delays have unnecessarily been as large as 20 blocks. Critically, all liquidations - either Oval captured or not - have been executed without any negative effect to the market.
Self Deployment
UMA has deployed Oval smart contract factories that make self deployment of Oval for Morpho markets quick, easy and a similar experience to deploying a Morpho oracle contract. See this easy to follow tutorial and feel free to reach out to the UMA team for assistance.
OEV Recapture Opportunity
OEV recapture is a large opportunity for lending markets to recapture value that is needlessly lost to the MEV supply chain. Oval is an industry leader and the above early adoption shows that OEV recapture can be safe and effective. While the OEV captured to date is not a large amount due to the low amount of liquidations on Oval enabled markets so far, there is still a large opportunity. If Oval were enabled on all Morpho mainnet liquidations on the August 5th market volatility, over $800k of OEV could have been returned to market lenders boosting growth for all Morpho ecosystem participants.