1/
Imagine Morpho markets, but supercharged.
Value from liquidations isn’t lost — it’s captured and sent back to the users of that specific market.
Introducing OEV-Boosted Morpho Markets.
Built on @MorphoLabs, curated by @Yearnfi, powered by Api3.
2/
Lending protocols offer incentives to liquidators to ensure timely execution of liquidations.
This incentive is typically a percentage of the borrower’s collateral — meaning larger liquidation events come with massive payout potential.
3/
Because the potential is so significant, the competition for it is too.
On Ethereum mainnet, this plays out in blockspace auctions — where liquidators bribe block builders for inclusion, often bidding away the entire incentive just to walk away with something.
4/
This reveals something important:
1. Liquidators are willing to do the job for much less
2. The entity deciding who's allowed to liquidate first walks away with most of the money
So what if we changed where that competition happens?
5/
Oracles are in a unique position — they determine when liquidations are possible through the price updates they submit on-chain.
Today, most oracles update blindly, letting the value they enable get auctioned off elsewhere.
But what if they didn’t?
6/
This is exactly what Api3 is changing.
Instead of letting liquidators bribe block builders after an oracle update...
Api3 lets them compete in auctions for the oracle update itself — the data that enables the liquidation in the first place.
7/
"Doesn’t this just mean Api3 profits instead of block builders?"
Fair question.
But here’s the twist:
We don’t keep it.
We route the majority of proceeds back to the market that created the opportunity in the first place.
10/
Yearn is curating a new class of vaults.
The first is OEV-Boosted USDC on Ethereum mainnet.
It allocates capital exclusively to OEV-Boosted Markets, capturing value at the oracle layer and sending it back to its users.
11/
The first OEV-Boosted Market is a high-demand blue chip pair: wstETH/USDC.
Why start here?
• It’s one of the most active pairs in DeFi
• Deep ecosystem liquidity
• Highest liquidation activity on Morpho to date
The perfect launchpad for realigned incentives.
12/
To kickstart activity, depositors into the OEV-Boosted Vault and borrowers from the market will earn USDC rewards.
As liquidations occur, value is captured and recycled back into the market — eventually replacing the need for external incentives altogether.
13/
OEV-Boosted Morpho Markets realign incentives in DeFi.
Built on @MorphoLabs.
Curated by @Yearnfi.
Powered by Api3.
Live now. With more on the way.
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