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Prominent Founders Examine Chainlink Keepers’ Role In DeFi’s Evolution

Chainlink Keepers is a decentralized service that allows developers to reliably automate regular smart contract triggers, eliminating the time, resources and risks involved with performing keeper operations manually or through centralized systems. Now live on mainnet, DeFi protocols like bZx and xToken have integrated Keepers to enhance functionality and improve user experience without compromising security or transparency.

Looking toward the future, what does Keepers mean for the expansion and advancement of the entire DeFi ecosystem? This big-picture question and specific use cases for Keepers’ automation infrastructure were examined by prominent DeFi founders – Aave’s Ernesto Boado, Synthetix’s Kain Warwick, PoolTogether’s Brendan Asselstine, and ChainLayer’s Peter van Mourik – during a panel discussion hosted by Chainlink Labs’ Anush Vijayaraghavan at SmartCon #1. 

Aligning Incentives

The Chainlink Keepers network is designed to be a fundamentally fair playing field where individual Keepers must cooperate with one another instead of competing against one another. Warwick illustrated why aligning economic incentives this way is vital to DeFi protocols like Synthetix, which he said previously amassed a “patchwork of different systems with different incentives” that caused on-chain gas wars and ultimately fell short of reliability and decentralization.

Warwick said having an off-chain system like Chainlink Keepers, where economic incentives are aligned, allows developers to have confidence that no winner-take-all effect will cause “a very brittle system” to emerge over time. 

“It was really important to us that the architecture we chose had this component of some kind of off-chain system to ensure that you didn’t have perverse economic incentives,” he said. 

Outsourcing Specialization

By establishing an industry standard for decentralized automation infrastructure, Chainlink Keepers allows developers to outsource maintenance and focus on developing more advanced hybrid smart contracts. Boado said that outsourcing the automation of smart contract functions like liquidations can improve protocols like Aave by “orders of magnitude.”

PoolTogether already used Chainlink VRF to randomly select its prize pool winners. Asselstine said that integrating Chainlink Keepers to reliably automate the rewards process allows his team to focus on what matters most. “We don’t want to run servers. Our goal is to become a pure decentralized protocol, so we want to stick to our core value-add, which is writing great smart contracts.” 

As a Chainlink node operator, ChainLayer plays a fundamental role in the blockchain ecosystem. Van Mourik said that Keepers, along with Chainlink’s Cross-Chain Interoperability Protocol (CCIP), “opens endless opportunities” for automation that facilitates its users’ goals. “We live because other people rely on our expertise regarding security,” he said. “I think all node operators are really going to be excited to be a part of automating more things on the side of our customers.”

Expanding Complexity

“What DeFi is today was a dream two years ago,” said Vijayaraghavan of Chainlink’s solution to the oracle problem, which enables the development of increasingly advanced smart contracts. The panel agreed that permissionless, reliable, easily-integrated Keepers will further accelerate DeFi’s evolution and mainstream adoption.

“The more these pieces become Lego pieces, the more innovation we’re going to see at hackathons and elsewhere,” Asselstine said. “As this system becomes more permissionless, I think innovation will only grow exponentially.”

Warwick said he views automation as a subset of the oracle problem. Chainlink’s decentralized oracle network facilitated an explosion of DeFi protocols that no longer had to build their own oracle solutions. “The effort of running your own oracles or your own Keepers is significant,” he said. “These are really enabling technologies.” He envisioned a future where Keepers is as regularly integrated as Chainlink’s oracles:

“Once it gets to that point, then it sort of goes parabolic.”

Watch the full panel discussion.

Explore other presentations from Smart Contract Summit #1’s playlist.

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