Manifold Finance Launches MEV Extraction Platform

04/04/2023 12:33 • Crypto & Markets • 63 views

On April 4th, it was announced that Manifold Finance will launch a liquid collateral platform in the coming months, which will design mevETH as a liquid collateral derivative that provides additional income through MEV extraction. In order to initiate the agreement, Manifold acquired the verifier set of Cream Finance, which means that those who pledge ETHs in Cream Finance will later mortgage to Manifold’s liquid mortgage agreement. When the agreement is initiated, Manifold will control approximately 25000 ETHs.

Manifold Finance will launch a liquid collateral platform and has acquired the set of validators from Cream Finance

Introduction

Manifold Finance, a decentralized finance (DeFi) platform, has announced the upcoming launch of a liquid collateral platform. The platform will design mevETH as a liquid collateral derivative that provides additional income through MEV extraction.

Acquisition of Cream Finance Verifier Set

In order to initiate the agreement, Manifold has acquired the verifier set of Cream Finance. This means that those who pledge ETHs in Cream Finance will later mortgage to Manifold’s liquid mortgage agreement. When the agreement is initiated, Manifold will control approximately 25000 ETHs.

Liquid Collateral and MEV Extraction

Manifold’s liquid collateral platform aims to provide a new approach to collateral management in DeFi. The platform seeks to optimize margin trading by designing mevETH as a liquid collateral derivative. mevETH derives its value from the extracted MEV (Maximal Extractable Value), which increases the collateral pool.
MEV extraction is the process of exploiting the transaction ordering in a block to extract economic value that would not otherwise be available. MEV can come from a variety of sources, including arbitrage, liquidations, and other on-chain strategies.

Benefits of mevETH

The implementation of mevETH provides several benefits. First, it provides collateral that is more liquid and has more utility than traditional crypto assets. This makes it easier to manage margins, and it can provide additional income through MEV extraction. Second, mevETH has additional value that is not available to traditional collateral assets. This means that the underlying asset can be more profitable, providing increased value for users.

Challenges and Risks

The implementation of mevETH also poses challenges and risks. One primary challenge is the burstiness of MEV extraction. MEV opportunities can be sporadic and unpredictable, making it difficult to accurately calculate the expected return rate for mevETH. Another challenge is the potential for MEV extraction to contribute to the complexity of the DeFi space, which can hinder adoption.

Conclusion

Manifold Finance is taking a new approach to collateral management in DeFi through the launch of its liquid collateral platform. The upcoming launch of mevETH as a liquid collateral derivative provides increased liquidity and profitability for users. While the implementation of mevETH poses challenges and risks, the platform seeks to optimize margin trading by providing innovative solutions to DeFi collateral management.

FAQ

Q: What is MEV extraction?

A: MEV extraction is the process of exploiting the transaction ordering in a block to extract economic value that would not otherwise be available.

Q: What is the benefit of mevETH?

A: mevETH provides collateral that is more liquid and has greater utility than traditional crypto assets. It also provides additional value through MEV extraction.

Q: What are the risks of implementing mevETH?

A: The burstiness of MEV extraction can make it difficult to accurately calculate the expected return rate for mevETH. Additionally, MEV extraction can contribute to the complexity of the DeFi space, which can hinder adoption.

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