# ETHWarsaw x RedStone Meetup - Rotunda PKO BP (14.01.2025)

- Channel: [ETH Warsaw](https://streameth.org/eth-warsaw)
- Date: 2025-10-07
- Duration: 26:21
- Watch: https://streameth.org/watch/yt-F_rf3qJtI9k
- YouTube: https://www.youtube.com/watch?v=F_rf3qJtI9k

## Description

Oracle Extractable Value: Plugging leakage of $250 Million by Jakub Wojciechowski, RedStone Founder & Marcin Kazmierczak, RedStone Co-Founder

​OEV is a problem worth hundreds of millions of dollars. This is value lost by DeFi protocols, that could be captured as additional revenue. Jakub presented the flow of liquidations happening without and with OEV implemented and why it matters in 2025.

🧜🏻‍♀️ ETHWarsaw is a series of educational and entertaining events for an active community of blockchain builders, developers and enthusiasts with focus on Ethereum-related tech. Once a year, we organize a large conference and hackathon for the community in the center of the Polish capital with speakers from the best web3 projects and participants from all over the world.

Follow ETHWarsaw on social media for the latest updates!
X (Twitter): https://x.com/ETHWarsaw  
LinkedIn: https://www.linkedin.com/company/ethwarsaw   
Telegram chat: https://t.me/joinethwarsaw
See you all at our events in Warsaw 🙌🏻

## Transcript

thank you PA so one we on purpose H took this two three minutes of delay just to check out NC skills of Pina as she said she wants to build it up so we also gave her the opportunity uh The Click ja cool so we can kick off and so to start I'm really glad to see more and more new faces at e foru meetups I'm also one of the co-founders at B so it's very close to my heart that the initiative is growing and expanding my name is Marson co-founded Redstone and and with me I have Jacob hi guys welcome to and today we are going to talk a little bit about Oracle extractable value which is a sort of me that is really related to Oracle updates but uh before we jump into the deeper topic for those that are not so familiar with redstone we uh built right now the fastest grora for the market uh top three globally all over the world H supporting plenty of uh top L clients such as Moro EFI ktina Elixir and so on um some notable events from last year 2024 we raised our series aim with uh notable investors uh are backed by topnotch um Angels including Stan from a s De from polygon or Al founder of zking we create regularly reports about specific areas just to Showcase that we don't sit and just you know tweet about mcoins or a agents as it's present right now on Twitter rather do also like deeper research pieces and we are mainly located here in waro and in general in Poland uh it's not that we only hire polls because we have international team but here is our core and this is also where we keep hiring so if you're looking for SDR so sales developing representative or marketing or U developer position like software engineer especially like back and full stack uh please come over to me jaob and the rest of the team and feel welcome to grab some Redstone socks and other swag on the WR from me um why didn't an oracle let's kick off with very simple question so oracles deliver data to DS for smart contracts execution it should be as simple as that right but then currently it's mainly Market data by market I mean financial markets both in crypto and traditional Finance so like volume interest rate market capitalization poly D valuation and so on and so forth so basically Finance data and then if you take even one step further actually over 95% of the data delivered by oracles are price PS of asset so in example stocks Commodities currencies and then it turns out that it's mainly cryptocurrencies so Bitcoin e usdc uh liquid staking tokens and so on and so forth and now question what is the most utilized price feed from Oracles in the whole crypto ecosystem anyone knows the answer give it a try maydt usdt no it's a very used one but it's not the most used one Bitcoin price Bitcoin is the second biggest total Market capin no no Dogecoin not total market cap fcoin you're missing the word computer guys if if if USD uh later a small present for the correct answer so if is this the most quoted one because in eum the dabs emerged and all the l2s are usually utilizing if as gas so it's the one currency that is used the most in defi in general so if USD actually represents about 90% of the C and we Redstone are def fasted from these Oracles in the market we have over 100 clients currently supporting 60 chain and securing over4 billion dollars some of our L are for example Moro Venus protocol uh leverage protocols such as gearbox Delta Prime which is also a team here in Poland staking and reaking uh ethery lombar which is Bitcoin staking very interesting narrative and sector together with Buon puer Renzo and VI portables for example Pendle VA or nus it just shows that we don't Target just one sector we want to support defi as a whole uh from the Oracle and prising perspective and now passing the mic to Jacob with the founder okay guys so today evening is all about orle extractable value I hope you find it interesting because it's about sample Val it's something you can extract it's a perfect match for crypto followers so basically that's let's try to explain the idea so starting with maybe not so obvious example that's a monument ofas I don't know if you know who the guy was maybe another quiz with an answer M Mar gu H Mar exactly well done so bra for this man uh and basically the story is about the the value of informations that you very speed because the guy basically there was no internet there was no smss he needed to pass the message by running he was a professional professional messenger but even for him running for 40 km was too much so basically he paid the price of his life just to deliver information faster and helped the C of to defend itself against the Nal invasion of person and maybe a more up toate scenario when also the speed of deler of information matters is a fascinating story like how a group of gigs deild a fiber optic channel to deliver the prices from the Chicago Exchange to New York and basically they need to pay 300 Millions for this infrastructure there was a cable going through half of the US and the result was the reduction of latency of data just by 4 milliseconds and a great product everyone was interested all of the hedge funds from New York Exchange were buying that so it's an analogy like how could be even less simple to in lat and how it could be applied to the def sector so for those of you who are not super familiar with how the DI protocols work let's take an example of a lending protocol so in lending protocol you deposit some funds and you can also borrow the funds and how we make sure that the protocol is solvent in other words how how can you make sure that you cannot take more that you deposited you need an oracle that provides a price for your collateral and evaluation of your loan and obviously the value of loan should be smaller than the collateral so always protocol has got small cion of security and this is necessary because obviously the price moves and it could move a lot because it's it's a crypto space so let's imagine that I'm thinking that this point is is too high and I want to show so I'm depositing my my Stables I'm taking a loan in Bitcoin I'm imately selling the Bitcoins and I hope to buy them back much cheaper basically I'm sh in Bitcoin that's my idea not only mind there was like L of short around that end of year believing that Bitcoin will F but I was wrong Trump on elction bitco is getting up and the value of my loan actually is increasing so if it gets Above This dotted line which is a liquidation threshold the protocol needs to offer my Lo in kind of an option so it can stay solent and in that situation Liquidators make come into play try to buy Al so by providing the borrow amount so basically in that case I'm able to repay the loan providing the Bitcoin and get a premium on that so usually the premium is around 10% and it's like a very profitable business for professional Liquidators and how profitable it will be so we took the data from our friendly protocol that we integrated this solution which is called Venus it's the largest Landing protocol on the bance chain and that's the data for only a single month so as we may see the the blue areas are for the protocol revenue from Liquidation obviously protocol also would like to have a chance in that but the red ones are the the profits of Liquidators so even a single markets much larger than a million and how to become a liquidator it's it's a lot of money to be taken we just need a bit of liquidity so in order to do that basically we need to be fast you need to be the first actor that can liquidate the position and how to do that so as I mentioned the landing Protocols are keeping track of the value of a loan and a collateral so the value could be changed after an oracle submits a new updated information about crisis so whoever can be the first one after the Oracle price update is the one who can liquidate first and take the profit and I would say it's a very brutal game as a lot of Liquidators is try to squeeze in just after this update and in order to do that they are bribing the BL Builders there is a whole very interesting area of M so the minor extractable value on different strategies and tactics how to get the best spot in the block so you can extract the value coming from Oracle price ofate and the value currently is been directed to M infrastructure and lob Builders our idea is to reverse these power funds and help to extract this value this priority key directly back to protocols but also create a new revenue streams for rest so in order to do that we are not l the Meb and bl Builders infrastructure rather we build a new abstraction on top of the transactions so a single blockchain transaction can include multiple sub transactions so obviously the one that updates the price but also the one that are executing liquidation and there's a question like how we build this n transaction so how we decide that which liquidation to be included just after the price update so there needs to be a auction mechanism when Liquidators are offering a bid to be the first one to execute the liquidation transaction and the higher Speer is selected and got the right to execute the transaction so there's a I think Super EAS but let me like EXP explain it in a simple words it's basically like whenever there is a possibility of a price update it goes to the auctioning service it's been offered to multiple Liquidators so the professionals can estimate their chances their profits and offer the bit that needs to be high enough to be selected but also well calculated so we can still earn significant Revenue obviously the option is selecting the highest beat so there's the highest revenue that could be extracted and then the selected beat is sent to the atlas Builder and sent on chain for an execution interestingly the whole process takes less than a half second which is like extremely fast and doesn't delay the price okay so in case of redstone actually the transaction is lipidated at the same point of time as the update of price coming from theayer and maybe a quick summary uh of the OB solution so building uh the O from redone we try to make it as easiest as possible for the prots so we are not the first one who came up with the idea of OE but the existing Solutions couldn't get enough traction mainly because there were like too complex to use so for example you needed to implement a lot of additional code you need to be dependent on secondary Network Etc so these external dependencies could create a lot of risk for a protocol and no one wanted to risk let's say billions just to generate maybe a few millions of extra Revenue that's why we abstracted away all of the complexity to the out and from the point of view of a protocol switching to that only solution doesn't require any changes of code so we eliminate the risk of introducing new backs through providing even a small changes to existing well audited code I would say another benefit of our solution is the reduction of the delay usually caused by o Solutions so from what we've seen on the market that the quickest one we usual introducing like a block or two delay until the price price could be sense to the protocol and we took an approach just to limit it to the bare minimum which in that case is just 400 milliseconds another Advantage is a very interesting side effect of creating this new mechanism so usually a process that is pushing prices on chain is a relayer and should guarantee that the price is updated like on some deviation from the existing price on chain so it promise you to put a price on chain when it deviates for example 1% from the previous one because obviously pushing price on chain is not for free it cost a lot so it could only happen at certain say TRS but in that case when a liquidator can push a price together with a liquidation transaction then actually a person and entity that earns from this price update is also motivated to pay the cost of providing this extra information on train so whenever there is an opportunity to liquidate a position we don't need to wait until the price get by 1% It would be like 0.1% a minimal change just just move the needle and open a position for liquidation so basically the liquidation can happen much more often and it's great for protocol because for landing protocols the the biggest threat is a bad de and if we can make the liquidation happen faster that's obviously it's of the great value for all the landing protocols and we also build the solution in a way that it doesn't affect the normal path of price update it's a it's an update it's a new feature and obviously the the large protocols that are keeping millions in as the value log are very risk so whenever we offer this o it runs in parallel to our standard process so anything is broken in the aution mechanism the standard delivery of prices is not affected so basically that's our unique of the O and the current status that been wrote out in production generates revenue and like a very interesting example of how to be creative in the space and how to look all this extra pieces of value that could be extracted and could be redistributed either to protocols to the users or to infrastructure providers oh now it's time forting of course uh yes hope you go grass what's going on with the OE itself and actually maybe before we should ask the question who has ever done any landing position on AA or similar Market please raise your hand or right so I would say we have 70% and who has ever good liquidated for example I've never good liquidated to be honest I mean I I with ours okay oh we got some that got so it's probably not too pleasant but basically when it happens then we make sure that some of the value that is captured by BS is redistributed back to Landing protocol who loves red hot chei peppers raise your hand and who has ever tried to buy tickets for tomorrow land so maybe to give you an analogy imagin before the auction like the ticketing starts the uh entity that is putting out the tickets gives you an opportunity to take part in an auction and bid for the tickets so instead of just paying the price for the ticket you also get a priority pass uh that you can pit for with other participants just to visualize a bit about the O itself and as Redstone uh we uh are coming to our accumulation points uh you know we've been building over four years uh shipping uh allog together interesting tag and also support supporting Builders uh the token is coming soon and we've never had any uh chat about the toen at any of the presentations conferences and we have to start doing so because it's actually happening early uh around the corner so the token itself uh is uh is going to be a central point of our community and people who support Redstone either from the perspective of the production of some content or activities around our Redstone Expedition our community are miners so if you would like to get uh on the board and join the M shft you should follow us on Twitter and watch out for the news that are coming in the coming weeks and as for the token itself uh when it comes to utility it is going to be utilized for data provider notes that support price feeds for the red ecosystem so that whenever they are they experience downtime or deliver bad data incorrect data Fe then they are getting slashed from the state that they put in the Redstone token uh itself and currently we're running still a points program uh so if you would like to get engaged feel free to join us on Twitter and after the presentation I and Jacob are going to stay if you interested in joining Redstone as the team itself uh we keep recruiting again for suit of position so feel free to come over and say hi and yeah do we have a moment for questions we do so do you have any questions I have one you're mostly going against uh chain L which provides data to Major like vast majority of of of crypto uh how do you stack against that how do you compare with a new product is that affecting your your position against against them like when we go abroad and you say hey we have this awesome polish company doing oracles I know we have more awesome companies to make barles but how do we how do we show Redstone against uh the bigger players for question right there's a saying no one goes fired by using ABM the big blue and probably like chain link could be compared in that analogy H chain link is a solid player it's not that we are going to kill them and like overtake the whole Market from them but the data shows that we are the preferred Oracle for anyone who was new to the space and this building we were the first Oracle to create liquid reaking token price fats for eeri when they had $20 million of TDL right now they're at 8 billion their fifth biggest protocol in the whole defi I know Mike since the very beginning when they were still doing a previous thing before they pivoted towards LRT which shows that we are early we supported etina which is right now I think $4.5 billion when they were pre-launch we already discussed with them creating the price Fe we supported lart before they accepted any any TPL any BTC in them right now they're about 2 billion dollars and it's very perspective uh ecosystem we support all the new chains we were the launch partner for uni chain in sonum today which is the Sony chain yes the big Corporation from Japan so I would say chain link is a safe option when you're a large trer and don't need to innovate much but if you're a builder that wants to create something exciting something Innovative on the oner then definitely Redstone is a good part of that I know so it's not only about the speed of information that VAR about the speed of development as we learned like D5 evolves a lot so this season we are seeing the DTC 5 and we are the first one to expand in that space and chaining is a huge organization it's got cross that's con some money but also con move extremely slowly and it's like also a question for you guys like if you were to choose let's say place to work you can either go to training probably get a where you can just let's say like send a few emails a day work with your 500 friends go on some Retreat meet these 500 people to network or to think like about politics like how to get promoted Etc who can work with us Redstone is still very small nimal team 20 engineers and we try to PR problem we try to came out with Solutions we try to innovate the space and I think we are say following the spirit of blockchain be be quick Innovative focus on engineering and improve iterate field for