What Is KeeperDAO and How to Use It?

2021-03-05 03:58:18 · 2785 views · 3 min read


Combine Yield Farming And Arbitrage Profits Together


KeeperDAO is an on-chain liquidity underwriter for DeFi. Using KeeperDAO, you can pool your assets to earn passive income through liquidations, arbitrage, and other opportunities from all across DeFi. 

KeeperDAO’s utility token ROOK price went up by 5.9% in the past 7 days. The token price has shown a close correlation with its on-chain users, transactions and volume: 7d users increased by 32.32%, 7d  transactions increased by 35.64%, 7d volume increased by 8.42%.

The total value locked in KeeperDAO worths $203.05M, which ranks No.16 among all the DeFi and DEX, ahead of 0x Protocol and Kyber Network.



So what are the core functions of KeeperDAO? How to earn with it?



Liquidity Pool

The liquidity pool is the entry point for most users. You can become liquidity providers and deposit assets into KeeperDAO, pooling your assets together to collectively earn a profit. Whenever positions go into liquidation on lending protocols, arbitrage appears between DEXs, or other similar opportunities present themselves on-chain, KeeperDAO uses its pool of deposited assets to capture the opportunity and earn profit. In between such opportunities, the pooled assets are lent out on various other DeFi protocols to accrue interest while not being used, which ensures that KeeperDAO is always earning profits to its liquidity providers.



Now it supports liquidity for ETH, WETH, USDC, renBTC and DAI. The max APY so far is 42.98% of the DAI pool.

Here’s an example of the ETH pool.

When you deposit ETH, you should notice that you have received kETH in return. These are known as kTokens, and they represent your share of the underlying tokens in the liquidity pool, including all future profits that are earned by the pool.




CompoundMakerDAO, and other DeFi protocols require user positions to be liquidated if their underlying collateral becomes worth too little. In KeeperDAO, under-writers are special contracts that "wrap" user positions using the KeeperDAO protocol. This allows keepers to safely close user positions without liquidating them, minimising user losses, especially in volatile markets. In return, the under-writers charge a small fee.




Not all assets in the liquidity pool will be utilized by keepers at all times. To maximize profitability, KeeperDAO takes under-utilized assets and distributes them to yielders. These contracts are custom integrations that deploy assets to other yield-generating protocols. This could be through lending, automated market-making, automated portfolio management, and so on. Anyone is able to develop, test, and propose a yielder for integration into KeeperDAO, and the KeeperDAO governance mechanism is responsible for determining how many assets are deployed to which yielders.



The code of KeeperDAO has been audited 3 times by independent third parties - samczsun, Quantstamp and PeckShield.



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