How Chainlink Keepers Can Bring DeFi to The Next Level

Chainlink Keepers went live on the Ethereum Mainnet in August 2021. Keepers enables smart contracts to automate key functions and event-driven tasks in a highly reliable, decentralized, and cost-efficient manner. This novel service is a vital step in solving the oracle problem of decentralized finance, and is expected to help DeFi protocols take the next leap forward.

Authors: Sven Henkel, Maximilian Bruckner

Chainlink is the biggest oracle provider

Figure 1 illustrates the concept of an oracle in a simplified manner, and shows how off-chain, “real-world” data can be used by smart contracts on the blockchain.

Figure 1: Illustration of bringing off-chain data onto the blockchain via Chainlink (Source: https://blog.oceanprotocol.com/bridging-blockchain-to-the-real-world-using-chainlink-afcf19cfbb73)

Chainlink Keepers offers automated execution in the smart contract world

DeFi welcomes Keepers with open arms

Let’s look at a different use case. Synthetix uses Keepers to monitor and distribute sUSD exchange fees and distribute SNX rewards to stakers automatically when the fee period has passed. The process is explained in detail in figure 2 below.

Figure 2: Synthetix uses Chainlink Keepers to distribute rewards to SNX stakers (Source: Chainlink)

The classification of Chainlink according to the ITC

Figure 3: The Chainlink Tokenbase entry (Source: https://itin.itsa.global/VNCM0FFY9)

Economic Purpose (EEP): Chainlink is listed as a Settlement and Access Token (EEP22TU02) due to its design as a means of settlement combined with its oracle access functionality.

Industry Type (EIN): The issuer of Chainlink is active in the field of Decentralized Data, Oracles and Infrastructure (EIN06DF04).

Technological Setup (TTS): Chainlink is an Ethereum ERC-20 Standard Token (TTS41BC). The Class “Ethereum ERC-20 Standard Token” captures every Token that is implemented by means of the ERC-20 standard on top of the Ethereum blockchain.

Legal Clam (LLC): Chainlink does not entitle its holder to any legal claim or rights against the issuing organization or a third party, therefore it is listed as a No-Claim Token (LLC31).

Issuer Type (LIT): The dimension “Issuer Type” provides information on the nature of the issuer of the token. Chainlink’s platform is built by Smart Contract Chainlink Ltd SEZC. Its Issuer Type is therefore Private Sector Legal Entity (LIT61PV).

Regulatory Status EU (REU): The dimension “Regulatory Status EU” provides information on the potential classification of a token according to the European Commission’s proposal for a Regulation on Markets in Crypto Assets (MiCA, Regulation Proposal COM/2020/593 final). Chainlink LINK qualifies as an Utility Token (REU52) according to the definition provided in Article 3 (5) of Regulation Proposal COM/2020/593 final.

References

[2] Chainlink 2.0 and the Future of Decentralized Oracle Networks

The International Token Standardization Association (ITSA) e.V.

● The International Token Identification Number (ITIN) is a 9-digit alphanumeric technical identifier for both fungible and non-fungible DLT-based tokens. Thanks to its underlying Uniform Token Locator (UTL), ITIN presents a unique and fork-resilient identification of tokens. The ITIN also allows for the connecting and matching of other media and data to the token, such as legal contracts or price data, and increases safety and operational transparency when handling these tokens.

● The International Token Classification (ITC) is a multi-dimensional, expandable framework for the classification of tokens. Current dimensions include technological, economic, legal, and regulatory dimensions with multiple sub-dimensions. By mid-2021, there will be at least two new dimensions added, including a tax dimension. So far, our classification framework has been applied to 99% of the token market according to market capitalization of classified tokens.

● ITSA’s Tokenbase currently holds data on over 4000 tokens. Tokenbase is a holistic database for the analysis of tokens and combines our identification and classification data with market and blockchain data from external providers. Third-party data of several partners is already integrated, and API access is also in development.

Remarks

Sven Henkel is a standing member supporting ITSA in its further development. He has a breadth of experience in all aspects of IT which he gained as a Management Consultant and in various IT management positions in the banking industry. Since 2017 he has gained extensive experience in the blockchain ecosystem with a special focus on regulatory aspects, payment solutions (e.g., digital euro and lightning) and IoT. You can contact him via sven.henkel@itsa.global and connect with him on LinkedIn if you would like to further discuss ITSA e.V. or have any open questions.

Maximilian Bruckner is Executive Director at the International Token Standardization Association (ITSA) e.V., and project manager at the Frankfurt School Blockchain Center. He has completed his Bachelor’s degree in Business Administration at the Frankfurt School of Finance and Management, and his written his thesis about the use cases of a token database. You can contact him via maximilian.bruckner@itsa.global and connect on LinkedIn.

The International Token Standardization Association (ITSA) is a not for profit organization working on holistic market standards for the global token economy.