Oracle Specific OFAs

Here is a brief excerpt from my latest post that explains why current OFA solutions like MEV-Share aren’t great for oracles.

Current OFA and oracle designs don’t allow for fair distribution of OEV auction proceeds to the dApp/users generating the OEV. This is because a data feed update transaction can be used to perform OEV on multiple dApps simultaneously, making it impossible to determine who deserves a share of the auction proceeds. An oracle-specific OFA can be designed to allow searchers to request order flow (OF), since oracles can generate OF on demand. This feature allows the oracle to sign data feed updates for use exclusively on specific applications, creating a method to direct auction proceeds directly to dApps where the OEV is generated.

Existing OFA designs also introduce latency to transaction propagation, which degrades the oracle performance. Searchers requesting OF through an OEV-specific OFA provides the benefit of reducing the latency impact of the auction.

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