Oracle Extractable Value

Oracles

Oracles let smart contracts access off-chain data. In practice, an oracle updates on-chain state by submitting a regular transaction, which means any OEV created by that update can be auctioned in much the same way as MEV around regular transactions.

This can be valuable to searchers. For example, if a lending protocol updates its internal ETH/USD price, that price change may create profitable opportunities to arbitrage

OEV Auctions

Nova runs auctions for oracle update transactions. Functionally, this is similar to a standard MEV auction on Ethereum mainnet. The main difference is how backruns are sent to block builders.

Instead of being submitted as an atomic bundle with the oracle update transaction, Nova may send backruns to the builder as standalone transactions. This is sometimes done to maximize the chance of inclusion, since some builders apply special handling or restrictions to oracle update transactions.

Participating in OEV Auctions

If you are already connected to Nova's searcher WebSocket, congratulations! There is nothing else you need to do. Oracle transactions and their backruns are sent via the same WebSocket as regular flow. Your backrun bundle must still reference the originating oracle transaction hash, just like any other auction. Nova takes care of how the backrun is ultimately delivered to the builder.