Dear Bankless Readers 🏴

Humans are not the only players when it comes to DeFi, or any financial markets really — the bots are also always busy and usually respond to opportunities way faster than mere mortals can. In this issue, we recap our recent article about Maximal Extractable Value (MEV) and its impact on the DeFi ecosystem, highlighting a new concept called Oracle Extractable Value which takes advantage of shared incentives to recapture and repurpose the value from MEV opportunities.

That said, if you’ve spent some time on Crypto Twitter recently, you may have seen some of the commentaries about Prometheum and its founder’s controversial appearance before the United States House Financial Services Committee. Prometheum’s approach is to be besties with the regulators, and it’s not winning them any friends among those in the cryptoverse wanting to see clarity from the U.S. around the application of securities law.

We finish this Recap on a top note, helping you explore how the Optimism Collective embraces continual improvement, shared decision making, and retroactive public goods funding to shape the future of Ethereum, and perhaps that of the world. Whether or not you received some OP tokens in the Optimism airdrops, any time is a great time to learn more about the Optimistic Vision.

As always, we aim to provide you with thought-provoking insights into the ever-evolving blockchain and DeFi landscape. Until next time, may your wallets be secure, your transactions be swift, and your crypto adventures be filled with excitement!

This recap is a convenient way to access all our recent articles, but if you prefer to read Bankless Publishing content while it’s sizzling hot off the press, follow us on Twitter or come and join us in Discord.

Contributors: Frank America, Kornekt, trewkat, Puretayo, HiroKennelly

Bankless Publishing is driven by a mission to ennoble its writers and showcase their content to a broad audience of crypto-interested readers. We also work with crypto’s leading protocols to help them get their message out to our audience. Whether you’re a writer or protocol team, we’re interested in talking with you.

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🏫 Crypto Basics Series

Each week we’re shipping a selection of our previous introductory web3 content on Mirror, enabling users to curate a web3 reference library by minting the articles as NFTs on Optimism.

✍️ Article Summaries

Understanding MEV and the Opportunity for Oracle Extractable Value

Author: siddhearta | Editor: trewkat | Designer: Chameleon

Maximal Extractable Value (MEV) impacts decentralized applications (dApps) and their users through increased transaction costs, diminished liquidity provider profitability, and a compromised user experience. This is particularly relevant in the context of oracle updates, as MEV searchers can engage in practices like frontrunning, capitalizing on arbitrage opportunities, and prioritizing transactions with higher gas fees. To tackle these specific MEV issues, API3 introduces the concept of Oracle Extractable Value (OEV) and its associated solution, OEV-Share, which aims to drive the DeFi space towards enhanced efficiency and profitability.

“In this model, searchers bid for the right to make oracle updates and collect the MEV associated with the transaction. The winning bid is distributed to the dApp and the external oracle provider. This creates a much more efficient system where price feeds are updated when the dApp requires them instead of being subject to deviation thresholds.”

Dive deeper into the MEV and OEV realm by reading the full article here.

Crypto Twitter Picks at the Remains of Prometheum

Author: Hiro Kennelly | Editor: trewkat | Designer: Tonytad

Prometheum made headlines when its founder testified before the United States House Financial Services Committee, claiming that there is a clear path for crypto companies to set up compliant digital asset exchanges. This statement contradicted the struggles faced by Coinbase, a well-known publicly traded company under the scrutiny of the SEC. The incident has raised suspicions about Prometheum's motives and its potential connections to government interests, sparking controversy within the crypto community.

“If you’re a well-connected securities lawyer who wants (or at least his kids want) to build a crypto exchange, what do you do next? Naturally, you hire a bunch of folks who used to work for FINRA, the SEC, and the Chicago Board of Options Exchange, the largest options exchange in the country!”

Read the full article by Hiro Kennelly to get the detailed gist of the story.

Optimism’s Governance Is Tuned Into Community

Author and Designer: trewkat | Editor: Hiro Kennelly

The Optimism Collective believes in building platforms that can change the world for the better. The Collective consists of two voting houses: the Citizens' House and the Token House. While the Citizens' House grants membership based on merit, Token House voting is based on ownership of OP tokens. The governance approach of the Optimism Collective revolves around continual improvement, following a five-week governance cycle with specific guidelines and requirements for proposal progress and voting. The Token House has completed three seasons, and the fourth season introduces Collective Intents to focus the Collective's efforts and budgets.

“Rewarding contributions to the Ethereum and Optimism ecosystem through retroactive public goods funding is just one facet of the work being done to scale Ethereum and design a more open and decentralised future for all. Another huge body of work to come out of the Optimism Foundation is the Collective DAO Archives, an open-source library of policies and governance processes from 20 different DAOs.”

Learn more about governance at the Optimism Collective in this explainer by Trewkat.

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