Charting New Territories: A Chainlink & Keep3r Partnership
What you need to know about the Chainlink & Keep3r partnership - 2020-12-09
For many, Keepers (and the role they play within blockchain ecosystems) represent a relative unknown. Their anonymity is surprising considering these network actors are commonly tasked with not only securing, but also adding intrinsic value to many networks.
In this article, reputation.link explores the various roles Keepers play within blockchain ecosystems. We also explain how Keepers and the keep3r.network are set to play an important role in the enhancement, and the future expansion, of Chainlink.
Firstly, we will cover some definitions.
Keeper is a term used to refer to an external person, entity, and/or team that performs crucial jobs in a crypto-economic model. Keepers can be bots, scripts, other contracts, or simply Externally-Owned Accounts (EOAs) that trigger events. Keeper jobs include oracle work, calling functions, arbitrage, off-chain logic, and a multitude of other tasks. Many DeFi projects are exploring the potential use of Keepers for important continuous functions.
A Job refers to a smart contract that wishes an external entity to perform an action.
In its simplest form, the keep3r.network can be described as a decentralised Keeper network that performs two key functions:
It allows smart contracts to register as jobs for Keepers.
It allows Keepers to register themselves as available to perform jobs.
The keep3r.network project is still in beta, but there are already a number of jobs that have been added to their website. For example, there is a SushiSwap oracle that makes and collects observations in order to provide historical moving price averages. This job in particular has been quite popular, generating 30 KP3R tokens in under 24 hours since it was added.
Chainlink is the most widely used and secure way to power universal smart contracts. With Chainlink, developers can connect any blockchain with high-quality data sources from other blockchains and real-world data. Chainlink is trusted by hundreds of organisations to deliver definitive truth via secure, reliable data feeds.
The Role of Keepers and Exploits in the Past
Because Keepers are responsible for performing crucial jobs within the blockchain ecosystem, their failure has the potential to impact the network - and not in a good way. In our search for references to Keepers, and the roles they have played within the blockchain ecosystem, one particular event keeps cropping up: Black Thursday.
The Black Thursday event occurred on the 12 March, 2020 and is associated with a massive crypto sell off. This sell off (which included an Ethereum price drop of some 43%) triggered a host of unintended consequences for MakerDAO, namely:
$4.5 million dollars worth of DAI left unbacked by collateral.
Significant financial losses for MakerDAO users.
Black Thursday was characterised by insanely high Ethereum gas prices, a huge backlog of transactions, overwhelmed networks, price crashes, and oracle failures (including the Maker 'Medianizer'). It’s a list that haunts the nightmares of everyDevOps team.
The roles that Keepers played during the event were numerous, but the most notable were tasks associated with liquidations. And, of course, on 12th of March liquidations were prolific.
While it’s not in the scope of this article to dissect the individual failings of Keepers during Black Thursday, it should be noted that the event highlights a crucial fact. Keepers are far from infallible. That’s why the proposed collaboration with Chainlink will likely add considerable resilience to the Keeper network as a whole. The partnership may, ultimately, aid in mitigating events like Black Thursday in the future.
Chainlink & keep3r.network
In his article, Cronje explains that within ecosystems there are often a wide variety of job types, ranging from small to critical. He goes on to note that small jobs often require a lower level of security than jobs deemed critical.
He “sees Keep3r and Chainlink as playing similar roles but operating in very different market segments.”
Cronje describes how keep3r.network’s niche is one that supports small to medium sized jobs and their typically lower security requirements. In simple terms, the keep3r.network (and its Keepers) look to serve projects that simply do not require, or do not have the available funds, for increased levels of security.
Chainlink’s software, on the other hand, is run on security-reviewed, sybil-resistant nodes. Operated by DevOps teams with years of experience running mission critical infrastructure, Chainlink is the premium level service provider. In other words, Chainlink consistently guarantees the highest level of security and is best suited to execute critical jobs.
In an ideal world—circumstances and finances permitting—all projects would utilise Chainlink. However, ideal situations are often scarce; this is why Keepers and the keep3r.network alike provide invaluable services.
The Future of the keep3r.network & Chainlink Collaboration
We see the future playing out under two mutually compatible narratives.
The first narrative watches established Chainlink node operators running a growing number of key Keeper jobs, leading to a network where the most relied upon Keepers meet the high standard for security, reliability, and sybil-resistance that is already observed across the Chainlink network.
The second narrative relates to existing and/or prospective Keepers, and is hugely significant with respect to the future of the Chainlink network. In his article Cronje notes that
“The Chainlink Network has a working reputation system, with the performance metrics of nodes actively being recorded on-chain for over a year now. This provides an immutable record of each node’s historical performance and is something we wanted to utilize for how Keepers are chosen for their role in maintaining key functions within the DeFi ecosystem.”
With their immutable record of completed jobs, these same Keepers can become eligible (reputation permitting) to upgrade their role from that of Keeper to that of Chainlink node operator. Cronje adds:
“As Keepers upgrade to become node operators they will also transition to the use of LINK, migrating their payment and staking methods to LINK, providing the same strong cryptoeconomic guarantees that power all Chainlink oracles.”
What it Means
The goal of becoming a Chainlink node operator will become infinitely more achievable. Any Keeper, of any standing, can transition from Keeper to Chainlink node operator by successfully completing Keeper jobs. It’s a fact that is immensely important for all DevOps teams looking to actively participate in the Chainlink oracle network. Especially for those who might once have thought the goal of becoming a node operator was untenable due to stringent entry level requirements. keep3r.network has just created what may turn out to be a key tool for scaling and growing the Chainlink network.
The significance of the collaboration between keep3r.network and Chainlink should not be underestimated. Increased reliability, security, number of jobs, type of jobs, and number of node operators has significant mutual benefits for both of these networks. This partnership is shaping up to be a significant game changer for the entire blockchain ecosystem.