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:
Verify the price — The oracle-signed price feed is cryptographically verified to ensure authenticity and freshness.
Execute the liquidation — The liquidation call is submitted to the protocol's smart contract.
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:
Protocol
66% (2/3)
Supra + OpenBlocks.ai
33% (1/3)
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.
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