How OVC Works

From Oracle Data to Captured Revenue in Five Steps

OVC bridges oracle data with on-chain actions, turning price feeds into monetizable execution pathways. The system operates through a structured pipeline that moves from partner identification through to revenue distribution.

Step 1: Target Compatible Protocols

OVC begins by identifying dApps that already integrate Supra’s oracle data feeds (e.g., ETH/USDC, BTC/ETH). Ideal partners are protocols with collateralized positions that require liquidations to remain solvent.

This includes:

• Lending markets where borrowers post collateral against loans
• Leveraged trading and perpetuals platforms where positions are maintained against margin
• Any protocol using Supra Oracles that has liquidation mechanics

Supra currently provides these price feeds. OVC positions Supra not just as a data provider but as a value-generating partner with the protocols that consume its oracle infrastructure.

Integration requirements are minimal. Protocols need only grant index permissioning and agree to a revenue-sharing arrangement.

Step 2: Real-Time Position Indexing

Once a protocol is onboarded, OVC deploys indexing infrastructure to continuously scan the partner’s smart contracts. The system tracks:

• Collateral ratios across all active positions
• Borrow amounts relative to posted collateral
• Health factors indicating proximity to liquidation thresholds
• Liquidation thresholds as defined by the protocol’s parameters

Liquidations are triggered when an oracle price update pushes a position below its required collateralization level. OVC monitors these conditions in real time, performing the heavy computational work off-chain before submitting results on-chain.

This off-chain computation, on-chain execution model ensures that the system operates efficiently without congesting the target chain.

Step 3: Cryptographic Triggering

When a signed oracle price update flags a liquidation event, OVC initiates execution. The process follows three steps:

1. Verify the price — The oracle-signed price feed is cryptographically verified to ensure authenticity and freshness.
2. Execute the liquidation — The liquidation call is submitted to the protocol’s smart contract.
3. Capture the fee — The liquidation fee (typically 5 to 15% of the liquidated collateral) is captured as part of the transaction.

This process is designed to be frontrun-resistant. Because Supra’s decentralized oracle is the entity that dictates the current price and subsequently determines whether a position is underwater, OVC has a structural execution advantage over external MEV bots that must rely on observing the same data with additional latency.

Step 4: Compound Execution

Execution is handled through OpenBlocks.ai, which provides the transaction infrastructure for OVC. Key capabilities include:

• Atomic bundles — The price verification, liquidation call, and fee capture are composed into a single bundled transaction. Either the entire sequence succeeds or it reverts.
• No mempool exposure — Transactions are submitted through private channels, eliminating the frontrunning vector that MEV bots exploit.
• Optimized routing — OpenBlocks.ai selects the most efficient execution path for each liquidation event.

The target capture rate is 90% of eligible liquidations, which is multiple times higher than passive approaches run by third-party liquidation bots. This is achievable because Supra’s oracle is the source of truth for the price data that determines liquidation eligibility.

Step 5: Revenue Distribution

All captured liquidation fee revenue is aggregated into a shared pool and distributed according to a straightforward split:

The expected outcome is a 3 to 5x increase in protocol revenue, since liquidation fees are often an unrealized portion of TVL turnover that protocols are not currently capturing at all.

Zero Developer Lift

A key design principle of OVC is that partner protocols do not need to build or maintain any MEV infrastructure. By adopting OVC, protocols avoid the cost and complexity of:

• Running MEV bots to compete for liquidation opportunities
• Operating server infrastructure for off-chain monitoring and execution
• Conducting ongoing research into MEV strategies and transaction ordering
• Maintaining custom code for liquidation systems across protocol upgrades

OVC is a plug-in monetization layer. Protocols focus on their product; Supra and OpenBlocks.ai handle execution and value capture.