KeeperDAO (ROOK)

From CryptoWiki

Basics

"KeeperDAO is a protocol that economically incentivizes pooled participation in keeper strategies which manage liquidations, rebalances and arbitrage on DeFi applications spanning trading, exchange, and lending."

History

"The KeeperDAO project was first revealed in December, as a joint effort between Amber Group and Talo Systems. Amber is Kullander's crypto trading and market-making firm, and Talo is a blockchain research firm run by Taiyang Zhang, who is also the CEO of DeFi protocol Ren. Kullander and Zhang jointly manage the KeeperDAO project."

Audits & Exploits

"KeeperDAO smart contracts have been designed to prioritize security, and have undergone 3 separate audits with third party auditors and independent consultants. Prior to any upgrade to the protocol in the future, we will undergo security audits as well ahead of any new deployment."

Bugs/Exploits

Governance

"KeeperDAO governance isn’t live yet and is slated to be released next quarter."

  • As of 3-3-2021 governance is speculated to go live in Q2 of 2021 according to the Discord.

Admin Keys

"KeeperDAO is non-custodial, and does not have access to user funds. However, we do hold an administrative key with strong privileges that allow us to pause and amend the contracts in case of an emergency. We plan on introducing a time-lock in order to give enough notice such that the community can monitor any changes before they happen. We are big fans of decentralized governance, but also realize the limitations of rushing towards decentralization too fast. Over time, we will be working towards gradually developing KeeperDAO into a fully autonomous, self-iterating system."

"no time-lock in price but keys are held in multi-sig"

DAO

Treasury

"The system centers around a (i) pool where LPs deposit assets for keepers to take flashloans out from, and (ii) a Treasury where keepers deposit part of their profits for the DAO to utilize, via ROOK enabled governance.

So far the Treasury has grown to $11.2M+ within 2.5 months — which maps to approx. $300k contributed per monthly active keeper. (Source)"

"The team has decided that putting the KeeperDAO treasury into the LP pool is the best action to take at this time. Putting the treasury to work internally minimises risk and reduces reliance on LPs. This is necessary as emissions will continue to drop with each passing quarter. This also reduces effective ROOK inflation in the meantime as the accrued ROOK will be held until the community decides what to do with it later. Depositing the treasury, currently worth US$26 million, gives about 165k in deposit fees (0.64%) to existing LPs. It also is a way for us to bet on ourselves and the future of KeeperDAO."

"0% of profits get diverted to Treasury these days anyway because the choice is optional for Keepers. They have a choice when they borrow from the LP. It is in the smart contracts that they use. There's no obligation to give any of the profits back to KeeperDAO, this is not important to us at this time."

Token

Launch

Token allocation

  • From their blog (2-11-2020):

"The initial total token supply is set at 1,000,000 ROOK. All ROOK tokens are unrestricted upon launch and should be counted as part of circulating supply. However, since ROOK will move to an inflation model in the future, the exact total supply can not be determined at this stage. The plan is for future ROOK rewards to be altered via governance so that protocol participants can find its own inflation parameters as the protocol evolves."

Utility

  • As of 3-3-2021 ROOK can be staked within Bancor. In the future it will be used for Governance and incentives.
  • From their blog (2-11-2020):

"ROOK is an ERC20 asset allowing token-holders to propose and vote on all protocol upgrades, as well as administering the profit share between LPs and keepers, alongside new system proposals."

"In terms of incentives, LPs can earn ROOK by depositing any of the supported assets to the protocol. By depositing capital into KeeperDAO, depositors earn a portion of the profits from strategies plus a subsidy in ROOK.

ROOK currently represents no economic rights over the protocol. However, with governance going live in the next few months, it’s not out of the question for the community to propose & pass a proposal to implement fee rights for token holders."

  • As of 3-3-2021 governance is speculated to go live in Q2 of 2021 according to the Discord.

Token Details

Stablecoin

Coin Distribution

Tech

How it works

"Keepers are on-chain actors which manage liquidations, rebalances and arbitrage on DeFi applications spanning trading, lending, and exchange. Transactions which borrow funds from the liquidity pool are contingent upon a return within the same block. Therefore, LPs bear no risk to underlying Keeper strategies."

" An on-chain liquidity underwriter for decentralized finance, built on top of the Ethereum blockchain.

KeeperDAO is a protocol that economically incentivizes pooled participation in ‘keeper’ strategies which manage liquidations and rebalances on applications spanning margin trading, lending and exchange. This allows participants to earn passive income in a game-theory-optimal fashion whilst ensuring decentralized finance applications remain liquid and orderly.

At a high level, KeeperDAO enables users to pool capital into Ethereum smart contracts to collectively profit from on-chain arbitrage and liquidation opportunities. Capital staked in these pools, such as USDC and DAI, is then used to exploit on-chain profit opportunities presented by protocols such as Compound, dYdX, MakerDAO and DDEX. These opportunities are not always present and occur often in times of high volatility. To mitigate having a large pool of capital being underutilized, all assets held by the liquidity pool are also constantly loaned out on markets such as Compound and dYdX.

KeeperDAO is maintained by a network of off-chain bots, who constantly watch the Ethereum mempool for opportunities and if found, will initiate an Ethereum transaction to participate in a Priority Gas Auction (PGA), competitively bidding up transaction fees in order to obtain priority ordering within Ethereum blocks. When KeeperDAO wins a PGA, funds are rebalanced through an on-chain rebalancer network."

"KeeperDAO is a liquidity underwriter in DeFi. Anyone can deposit capital and earn a profit in return for allowing the protocol to borrow that capital to execute liquidations, rebalances, and arbitrage opportunities in the DeFi ecosystem. All profits from these opportunities are split amongst the protocol’s liquidity providers and Keepers—the actors who initiate the transactions. The protocol currently allows deposits for a range of supported assets including ETH, WETH, USDC, renBTC, and DAI.

Keepers are on-chain profit seekers that use the protocol’s capital to execute arbitrage and liquidation opportunities. And similar to LPs, Keepers can be anyone, albeit it’s a bit more complicated as you need to design and program a strategy that can earn a profit in a single transaction—like monitoring an arbitrage opp between Kyber and Uniswap between a specific pair. In theory, KeeperDAO can execute any on-chain opportunity on Ethereum. Examples include liquidating positions on Compound or Aave, taking over Maker Vaults, or capitalizing on arbitrage opportunities between DEXs like Uniswap and Balancer. It’s ultimately up to people to design Keeper bots to execute the opportunity at hand."

"There are two stakeholders in the KeeperDAO ecosystem: Keepers and Liquidity Providers. The keepers take part in the strategies to realise the value arbitrage and liquidation opportunities, and liquidity providers provide the funds to take advantage of these opportunities.

Let’s take an example to understand how it works. Say you notice an arbitrage opportunity, you can get a zero-interest flash loan from the liquidity pool. You take the loan, perform arbitrage/rebalancing and once this opportunity is realised, the funds+profits are returned to the protocol. You receive a share of the profits in the form of $ROOK, the native token for the KeeperDAO ecosystem."

Fees

Upgrades

Staking

Liquidity Mining

"KeeperDAO is in the process of wrapping up its liquidity mining program to distribute ROOK tokens to LPs and keepers (on a ratio of 1:3) and is expected to end in early February. ROOK claims have totaled ~160k ROOK (~$50M at current ROOK/USD and 50% of liquid mcap), with the Top-20 claimants ranging from 2k to 17k ROOK.  (Source 1 & 2)"

Interoperability

Other Details

Oracle Method

Privacy Method

Compliance

Their Other Projects

Roadmap

  • Can be found [Insert link here].

"KeeperDAO is also planning to issue its own governance token to use it as a balancing mechanism to manage incentives between keepers and liquidity providers. The token will be launched with an incentive program, Kullander told The Block, without disclosing a specific timeline."

Usage

"There are currently 208 unique depositors to KeeperDAO's liquidity pool, and the pool is currently sized at 4,474 ETH (worth about $1.5 million), according to a Dune Analytics dashboard shared by Kullander."

"So far, approximately 19 keepers on average have been active per month with 2,598 unique addresses contributing to the pool. Flash loan volumes — a proxy for keeper activity — have been growing at a rapid pace year-to-date (~85% week-on-week). This sharp acceleration in 2021 happened parallel to both price (2x) and volatility (+35%) climbing up in DeFi, and benchmarked off of an equally weighted basket of DeFi blue chips. The total lifetime volume of flash loans from the KeeperDAO pool stands at a whopping 900M+ USD (in v2). (Source)"

"According to Token Terminal, KeeperDAO has been deploying over $20M per day over the past week across different strategies for the existing 22 Keepers running on mainnet today. WETH is currently the dominant player in terms of borrowing volume as it’s used in excess of $5M per day. The protocol is currently boasting over $140M in value locked from liquidity providers, according to Dune Analytics."

Projects that use or built on it

Competition

"0x Founder Will Warren explains the difference between 0x and KeeperDAO, “KeeperDAO's hiding game is a trade execution coordinator (TEC)….0x protocol explicitly leaves trade execution up to the developer. This allows for distinct pools of off-chain 0x orders, each with custom rules around trade execution.”"

Pros and Cons

Pros

Cons

Team, Funding, Partners

  • Full team can be found [here].
  • Tiantian Kullander; co-founder

"There are currently six people working for KeeperDAO, two more are joining soon, and the project is looking to hiring more staff, Kullander told The Block."

"KeeperDAO is founded by a team with experience working at publicly traded companies, running hedge funds and managing private investment vehicles. The team consists of people who have managed large pools of liquidity for some of the biggest institutional investors in the world.

The project is a joint venture between Amber Group and Talon Systems: a crypto trading firm run by Tiantian Kullander and a blockchain research firm run by Taiyand Zhang, respectively."

Funding

"The "seven-figure" seed round, i.e. worth more than $1 million, was led by Polychain Capital and Three Arrows Capital, KeeperDAO co-founder Tiantian Kullander, told The Block. The project has no plans to raise more funding in the near future, said Kullander."

"As you may have seen - we're happy to announce that Alameda/FTX is now an investor of KeeperDAO via a direct purchase of 42,800 ROOK tokens! In joining as participants in KeeperDAO, Alameda/FTX has listed ROOK spot and perpetual markets, and has committed to act as an CEX LP in order to maintain orderly markets with consistent and predictable liquidity in ROOK."

Partners 

"The KeeperDAO treasury has completed a token swap exchanging 534 ROOK and 500k USDC for 500,00 KNC. @loi_luu joins as an advisor."

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