Eliminate MEV and learn about Pyth Network's new product Express Relay in one article

One day in the currency circle, one year in the human world.

This sentence not only talks about the rapid changes in asset prices in the crypto world, but also the rapid business development of the projects.

When a project leaves for three days, what new trends will there be?

Previously, the top oracle project Pyth Network quietly launched a countdown page on its official website, with curious hints of text:

"Take back control, DeFi will be different."

On July 11, with the convening of EthCC, Pyth Network also revealed this countdown puzzle---a new product Express Relay, facing the difficult to peek but troublesome problem in the encrypted dark forest MEV problem.

So this "regained control" actually points to the value that DeFi projects and users should have received but were taken away by MEV.

If you are a crypto practitioner/trader, I believe it is easy to understand the cost increase problem caused by MEV when building projects and transactions;

It’s just that the problem caused by MEV, why can it be solved by an oracle? Project solved?

If Pyth’s previous functions were more useful before the start of DeFi business (price feeding link), then targeting products at MEV may mean that Pyth has expanded its service scope into DeFi business (trading/clearing).

From making the data source of the DeFi protocol better to making the business itself run better, how is Express Relay technically implemented?

Pyth Network, this seemingly "not doing business" business expansion, what are the chances of winning?

In this issue, let’s go deep into Express Relay to find the answers to the above questions.

The dark forest that cannot be escaped, DeFi people who are hunted by MEV

To understand Express Relay, you must first take a look at the problems that today's DeFi projects have encountered.

A status quo that is difficult for you to detect but exists objectively is:

In the crypto-dark forest, DeFi projects are actually a vulnerable group and are hunted by MEV all the time.

In this hunt, DeFi projects and users actually collectively paid more.

Here, the author does not intend to popularize MEV in detail. Let us use liquidations that often occur in DeFi business as a more understandable example:

• Liquidation begins: DeFi protocols (such as lending platforms) when users are insolvent , which will trigger the collateral liquidation process.
• Searchers move out: People who specialize in finding and executing liquidation operations (Searchers) start taking action. They are motivated to perform liquidations because of the rewards DeFi protocols provide. These rewards typically come from protocol fees or direct liquidation rewards, incentivizing searchers to perform these actions.
• Miners and MEV: Since the miner (Miner/Validator) controls the ordering of transactions, searchers have to pay higher tips to ensure that their transactions are processed with priority, and the miners extract greater value.
• Result: The MEV problem occurs, and most of the rewards paid by the DeFi protocol are taken away by miners, not searchers or protocol users.

It’s a bit like when you order takeout, it’s more expensive. Even if the price of the food provided by the merchant remains unchanged, both the platform and the delivery company need to take a share of the pie, and ultimately the price of your order will increase.

As for the DeFi project itself, the problems caused by MEV will put the project into a situation of "overpaying" liquidation bonuses. To put it bluntly, liquidation becomes more expensive:

Since MEV still has to share the cake, in order to ensure liquidation To be timely, lending protocols need to offer high rewards to attract searchers. High liquidation rewards mean more funds are used to pay these fees instead of improving the efficiency and profitability of other aspects of the protocol.

Public data shows that Aave and Compound on Ethereum have liquidated nearly US$2.5 billion in collateral in history, of which the debt itself is US$2.35 billion, which means that US$150 million has become liquidators for these two projects. Rewards are provided, but most go to miners.

The 4-5% liquidation bonus seems a bit excessive relative to the regular order depth.

When liquidation rewards are overpaid, these additional fees may eventually be passed on to users through higher interest rates or other fees.

In addition to the issue of high costs, another point that cannot be ignored is that it is difficult for emerging DeFi protocols to find a reliable source of liquidators.

Liquidation is fragmented among various protocols; with different clearing interfaces, resulting in a lack of available liquidators for each protocol.

As a result, many potential searchers may be hesitant to become a liquidator. This can lead to low protocol availability and low searcher diversity.

As a result, it is very time-consuming and expensive for emerging DeFi protocols to build a reliable and lower-cost clearing network. Developers need to spend a lot of time and resources convincing searchers to integrate their protocols, and they also need to accept MEV issues.

To summarize, in the dark forest environment that is difficult for end users to perceive, we have always lacked a unified, open and easy-to-use industry standard, in the liquidation process similar to the above or where more DeFi businesses occur:

• Let the value flowing from MEV to miners (validators) return to the hands of DeFi protocols, users and searchers;
• Enable DeFi protocols to connect to high-quality searcher networks to obtain reliable liquidation.

And this is also the starting point for the launch of Pyth Express Relay.

Express Relay: Efficient order flow auction to recapture the leaked value

Oracles are not just oracles.

Douro Labs, the company behind Pyth Network, has been experimenting with a solution based on its experience in developing oracle protocols that provide low-latency data to the blockchain to make DeFi’s clearing process more cost-effective and maximize to reduce the impact of MEV problems.

This solution is ultimately the Pyth Express Relay (hereinafter referred to as ER) we see now.

If you want to quickly understand the effects that ER can achieve, you can actually explain it in one sentence:

MEV is not inevitable, and everyone is a winner.

If we want to specify the different participating roles, we can directly give the too long version without reading, that is, the benefits of using PER:

• The protocol and users can better recover what was previously taken by miners/verifiers The value of going
• Developers can deploy applications faster
• Searchers can more easily participate in liquidation and other aspects, which is altruistic and self-interested.

When it comes to the implementation details of PER, its design idea is actually to separate some transactions through isolated off-chain order flow auctions to reduce the MEV space of miners.

You can understand it as Express Relay can directly connect the DeFi protocol to a self-established searcher network and allow searchers to bid for the priority of transaction submission; and the ordering of these transactions is in a network that is not controlled by miners. are determined in an independent auction, thereby eliminating the possibility of their MEV value capture.

This is equivalent to a round of screening, sorting, optimization and packaging before the transaction is submitted to the miners for sorting; before the transaction is transmitted to the miners, the value has been clearly arranged.

By enabling DeFi protocols to auction priority for these critical operations, Express Relay ensures searchers can more actively compete for transaction value. An immediate benefit is that DeFi protocols can spend funds more efficiently on activities such as setting liquidation rewards and pass these savings on to stakeholders such as the protocol’s users.

If you still don’t understand, the above picture abstracts away all the technical details and tells you the difference between using Express Relay and not using it in the most intuitive way:

The left side shows the traditional transaction workflow. In contrast, where the value created by the protocol is leaked to block miners, Express Relay eliminates the ability of miners to extract value for searchers scanning opportunities and enables DeFi protocols to capture the majority of value from searchers.

In human terms, the value flow of transactions no longer flows to miners.

我们也可以再通过一个实际的工作流程来进一步理解 Express Relay 到底是怎么保护价值的。

相关角色

• Protocol（协议）：DeFi 协议会提交交易机会（Submit Opportunity）给拍卖服务器。这些机会可能包括潜在的套利机会、清算机会等。
• Auction Server（拍卖服务器）：拍卖服务器接收来自协议的交易机会，并将这些机会公开给搜索者。搜索者会对这些机会进行竞标（Bid），提交他们的出价。拍卖服务器会根据出价选择出价最高的搜索者，并将获胜的交易提交回协议（Submit winning transactions）。
• Searchers（搜索者）：搜索者接收到拍卖服务器提供的交易机会后，会进行竞标（Bid）。竞标成功的搜索者会将他们的交易提交给拍卖服务器，拍卖服务器再将这些交易提交给协议。

详细步骤

• 提交交易机会：协议发现某些交易机会后，会将这些机会提交给拍卖服务器。
• 竞标过程：拍卖服务器将这些交易机会展示给所有的搜索者。搜索者会对这些机会进行分析，并提交他们的竞标价格。
• 选择获胜者：拍卖服务器根据搜索者的竞标价格，选择出价最高的搜索者。获胜的搜索者将他们的交易提交给拍卖服务器。
• 提交交易：拍卖服务器将获胜的交易提交回协议，协议再将这些交易打包并提交到区块链网络中。

可以看到，这套隔离的链下优先拍卖设计，通过安全拍卖将 DeFi 协议直接与搜索者连接，以增强市场效率的交易。Express Relay 最终将矿工 / 验证者从 MEV 供应链中剥离出来，并赋予协议管理其自身交易优先级的钥匙，重新掌控了控制权。

即拿即用，不必从头开始

看起来 Express Relay 解决了我们前文提到的第一个问题：DeFi 协议的清算成本很贵。

而另一个问题在于，新兴 DeFi 协议很难找到可靠的清算人来源；Express Relay 给出的对策则是”即拿即用“。

针对早期协议，Express Relay 提供了加速部署的解决方案：没有 Express Relay，开发者需要建立自己的清算网络，并说服搜索者与他们的协议集成；有了 Express Relay，新协议可以无缝连接到已建立的顶级搜索者网络，以启动他们的清算需求。

协议甚至都不用走啥纸质合同的签署流程，直接调用 Pyth Express Relay 的合约并进行部署，即可快速的建立起自己的清算网络。

同时，对于搜索者来说，Express Relay 将多个 DeFi 协议的清算和其他有价值的交易机会聚合在一个地方。搜索者可以竞争所有这些机会，而不必为每个协议的接口编写定制代码。通过降低集成成本，Express Relay 使搜索者能够更高效地运作，搞定清算人来源的困境。

你可能会问，这样操作下来，协议是更方便了，但矿工 / 验证者拿不到以前能获取的 MEV 价值，不干了怎么办？

如果越来越多的 DeFi 协议和搜索者采用 Express Relay，这种技术将逐渐成为行业标准。随着采用率的提高，矿工将不得不适应这种新的交易模式，因为大部分高价值交易都会通过 Express Relay 或类似技术进行。

此外，考虑到 Pyth Network 在预言机赛道中广结良缘的特性，Express Relay 可以与多个大型 DeFi 协议合作，形成一个联盟共同推广这种技术，增加其采用率和影响力。

毕竟谁不喜欢一个即拿即用，又能受益的解决方案呢？

看似不务正业，实则做大做强

Pyth Network，在大家的印象里，还是和预言机绑在了一起。

于是你很容易怀疑，搞预言机又跑去搞 MEV， 难道不是一种不务正业？身兼多职有能力搞成吗？

情况恰恰与疑虑相反。

上文提到的广结良缘，实际上已经在 Express Relay 上发挥作用。已有的预言机业务更像是铺开了一张网，在供需两端形成了可以迁移且巨大的网络效应。

从供给端看，就拿 Express Relay 所构建的搜索者网络来说，之前与 Pyth 合作的顶级做市商们，其实都已经确认在新产品中充当搜索者的角色。

官方信息显示，目前 Wintermute、Flow Traders、Flowdesk、Auros、Caladan、Tokka Labs、Swaap Finance 等 7 家做市商，已经快速的成为了帮助 DeFi 协议进行清算业务的搜索者。

这也就意味着 Pyth 的 Express Relay 几乎不怎么需要考虑冷启动问题，几家顶级 MM 天然的"带资进组"，成为了这个新建搜索者网络的排头兵。

这是一个全新做 MEV 相关业务的项目，无法比拟的优势。

同样在需求端，已有预言机业务服务的项目，大多都在借贷、Perps 等 DeFi 领域，既需要数据喂价，当然也需要清算网络的支持；

如果两个需求能被同一个 Pyth 所提供的不同产品解决，何乐而不为呢？

因此，这其实非常像 Web2 中的流量变现，即有了流量之后，依托用户基本盘做更多业务；而对于 Pyth 来说，之前的预言机业务，已经为其积累了名正言顺、范围通广、合作紧密的业务基本盘。

100 + 数据发布者、500+ 喂价数据、300+ 已经集成的 dApps 以及 60 条支持的链... 金铲子效应显然不仅在空投领域发挥作用，在业务扩展与平移的过程中，同样起到了顺水推舟的作用。

多栖明星的未来

演而优则唱，是娱乐圈中艺人常见的发展路径。

从 Express Relay 来看，当业务能力过硬且不同业务有所关联时，Pyth Network 也在向多栖艺人的方向发展，从预言机到 MEV，解决多个用户不易感知、项目却十分刚需的幕后问题。

当一个项目成为加密世界幕后编排的集大成者，让 DeFi 协议们得到更加高效、成本更低的多种服务时，幕后的工作逐渐理顺，前台的演员自然也能得到更好的发挥空间，台下的观众自然也能得到更好的入场体验。

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