Thanks to the OpenZeppelin team for the detailed review and the Compound community for the thoughtful process around this RFP. We wanted to briefly respond to a couple of the points raised in the assessment of our submission.
On searcher participation:
We’d like to address the fact that searchers are listed as a trust assumption only in Api3’s review, despite the reality that all OEV solutions — including RedStone and Chainlink SVR — rely on searcher participation. This isn’t a new dependency introduced by OEV. Compound already depends on external liquidators to act on price data and absorb underwater positions.
As Gauntlet has shown in multiple reports (e.g. here), this setup has been fragile at times, with multi-hour delays in collateral purchases and minimal liquidator activity on L2s like BASE and Optimism.
OEV systems don’t eliminate the need for searchers, but they improve the situation by tapping into healthy, already-active searcher networks that these solutions built up already. In our case, the system is already live across multiple chains, with consistent participation from searchers who are competing for value across protocols.
By adopting an OEV solution, Compound can benefit from this participation without having to bootstrap a searcher ecosystem on its own, as has been the case with previous Comet deployments.
On Caldera:
Regarding the comment on Caldera and the current deployment of our auction logic: we understand the reasoning that chains like Arbitrum might be more economically incentivized to maintain network uptime than Caldera would be for our dedicated L2.
That said, migrating to a generalized L2 like Arbitrum introduces tradeoffs, primarily the risk of sharing blockspace with unrelated activity. This is the key downside of moving from a purpose-specific environment, where the auction system is optimized for one function, to a general-purpose chain.
We’ve internally considered moving the auction logic to Arbitrum multiple times already, and if this turns out to be the only blocker for Compound adoption, we’re happy to explore the migration after our solution has been adopted on some markets.
General comments esp. in regard to the comparison thead:
For large oracle providers, OEV revenue—even from a protocol as large as Compound—has limited impact. Whether they earn $1 million per year through an OEV product like SVR is unlikely to meaningfully affect their operations or priorities.
For Api3, it’s entiely different. OEV revenue from Compound has the potential to cover a significant portion of our expenses and bring us closer to our goal of building the first truly profitable oracle model in DeFi. Making OEV work for Compound isn’t an add-on; it’s core to our strategy.
That’s why we’re uniquely incentivized to maximize the value Compound captures. When Compound earns more, we do too—and the outcome actually matters to us.
We feel the need to highlight this again, as the Compound community is being offered significantly less favorable revenue terms in some proposals than what those same vendors are offering to competing protocols. While it’s understandable that revenue splits can vary between providers — as seen in this RFP — the fact that a single vendor is offering Compound materially worse terms than its competition (e.g. AAVE is being offered 65%) speaks volumes about the level of priority and respect being shown toward this community.
Thanks again for the opportunity to be part of this process. We’re excited about what OEV can unlock for Compound and are ready to help prove it in practice.