1/ With the initial launch of
#Chainlink
Keepers (in beta on mainnet right now), it seems there is a bit of community misunderstanding about how it works & just how big of a market this opens up for the Chainlink Network. I wanted to try and clear some things up with this thread.
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2/ First off, the Chainlink Keeper network is completely separate from the KP3R network. It’s different in its architecture, node operators, and native token. Chainlink Keepers use Chainlink nodes, a rotating jobs architecture, and require payment in the LINK token for all jobs.
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3/ The purpose of a keeper is to automate the triggering of smart contract functions (tell code to run). All smart contracts are asleep by default & require an external entity (keeper) to wake them up via an on-chain transaction. Without this "poke", a smart contract won't run.
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4/ Some protocols don’t require a keeper because user transactions act as the keeper telling the smart contract to run code. For example, an AMM buy order triggers the contract to supply liquidity. Some protocols use arbitrage profits to incentivize bots to perform keeper jobs.
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5/ When a loan is undercollateralized, the keeper will call the contract’s liquidation function. When an algorithmic stablecoin needs to rebase the supply, a keeper will call its rebasing function. When a user’s limit order is hit on a DEX, the keeper calls its trade function.
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6/ It’s important to note that the oracle is not always necessary (although it often is); i.e., time-based keepers. The oracle stores data on-chain for the smart contract to reference, but the oracle doesn’t trigger the execution of the smart contract (the keeper triggers it).
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7/ Once triggered, the contract will run. However, the contract often verifies conditions. For example, liquidation functions reference the oracle report to verify if the loan is undercolalteralized before liquidating. If not, the function is invalid and the keeper wasted gas.
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8/ The keeper can trigger the contract based on any on-chain or off-chain condition, such as at a certain time of day, when prices hit certain upper/lower bounds, when loans are deemed under-collateralized, when a sports match has ended, etc. The possibilities are limitless.
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9/ Prior to keepers, developers would run these tasks manually or utilize a centralized server, particularly because they still required smart contract verification. However, this introduces a central point of failure & requires a lot of time to continually monitor and manage.
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10/ Bad keepers introduce other risks too, particularly contract functions responsible for real value & time-dependent. For example if a keeper doesn't liquidate undercollateralized loans then the protocol could become insolvent, or trigger a limit order on time causing slippage.
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11/ Chainlink Keepers are great because they use proven DevOps & rotate jobs, leading to high reliability & low costs. Competition makes keepers expensive & unreliable because competition drives bidding wars while low margins lead to a lack of predictably reliable participation.
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12/ Ultimately, keepers will open up a massive new job market for Chainlink nodes, possibly on par or larger than the data market. They make the Chainlink Network one step closer to being a full-service off-chain layer, now giving dApps data and automated contract triggers.
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13/ The Chainlink Network is uniquely suited for keeper services because it has a large network of proven node operators & an incentive structure for top performance at low cost (rotating jobs + best nodes). It will also simplify off-chain services for dApps (just need Chainlink)
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14/ Hope this clears up confusion for people & you all understand how big of an addition Keepers is to Chainlink's growing collection of decentralized services. There are so many unique ways to create customized contract triggers, & keepers make smart contracts truly automated.
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@Crypto___Oracle
Awesome thread ! Thank you!! $link "1/ With the initial launch of
#Chainlink
Keepers (in beta on mainnet right now), it seems there is a bit of community misunderstanding about how it works & just how big of a market this
A thread from
@Crypto___Oracle
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@Crypto___Oracle
@ChainLinkGod
Great breakdown of the subject, now i really understand what this means for the whole ecosystem
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