Keep Network is home of tBTC, the first fully trustless, decentralized and censorship-resistant Bitcoin peg on Ethereum. tBTC V1 system was launched in September 2020 and the protocol has been running flawlessly ever since. More than 14k BTC has flown through the protocol and has 300m TVL. All circulating tBTC is 100% backed by Bitcoin held in deposit specific wallets, of which the keys are split over a group of nodes. The system is further over-collateralized by the nodes themselves, putting down ~200% of the guarded BTC value in ETH.
Although the system works as designed beautifully and flawlessly, there are economic constraints for scaling because of the upfront 200% collateral requirement to back the deposits. This additional collateral requirement plus the huge demand for trustless tBTC has become a bottleneck. To address this scaling issue, Coverage Pools are introduced on road to V2.
Coverage Pools are pools of collateral assets (KEEP, ETH, WBTC etc) provided by passive investors (a.k.a underwriters), to ensure the safety of the peg in exchange for fees and rewards. Coverage Pools’ function is to be a backstop for tBTC, acting as the buyer of last resort in tBTC v1 and to insure against fraud in tBTC v2.
Coverage Pools will unlock more growth by:
- Shifting the burden of extra collateral from signers to underwriters.
- Expanding the available passive capital that backs tBTC.
- Simplifying the staking operation.
- Lowering capital entry bar to become a staking node operators (signer)
- Increasing capital efficiency of the whole system.
You can read more about Coverage Pools and risks here —
Steps to Deposit KEEP into Coverage Pools : —
I am now going to guide you through the steps required to deposit KEEP into Coverage Pools and earn KEEP rewards.
Which Assets can be deposited ?
It is now launching with KEEP asset. It is expected to expand to many other assets (WETH, WBTC, TBTC KEEP/ETH etc) at a later date.
- An installed and unlocked browser MetaMask Extension to interact with Keep Dashboard.
- KEEP tokens to deposit into Coverage pools.
- Some ETH for transaction gas costs.
Note: I’m using Ropsten testnet for this guide and the steps will be same on Mainnet.
- Go to Keep Dashboard and connect your wallet through MetaMask.
Once connected — you will see the TVL, current APR and other details.
Note: The numbers shown above are high because I’m on Ropsten testnet.
2. Go to Coverage Pools sections (if you are not already) under Earn — Coverage pools. This page has high level details on how the coverage pool works. Please go through it, if you are not aware of how Coverage Pools work.
3. Once you understand and ready to deposit, click ‘Deposit’.
4. Enter to amount of KEEP you want to deposit and click ‘DEPOSIT’. For this guide, I’m depositing 10,000 KEEP.
5. You will be prompted with a popup to confirm your understanding of 21 day cooldown period (for withdrawal). Confirm by clicking the checkbox and click ‘DEPOSIT’.
6. You will now be prompted with MetaMask popup to confirm the transaction. Adjust the gas prices if needed and click ‘Confirm’.
7. Wait for transaction to be confirmed and you are done. It’s as simple as that. You will also see a deposit confirmation on Keep Dashboard as below.
You will notice that you have received covKEEP into your wallet. This is your collateral token to represent your share in the Coverage pool.
Monitoring Deposits and Rewards: —
Go to Coverage Pools — Deposit section in Keep Dashboard and you can monitor your deposits and rewards.
Withdrawing Deposits and Rewards : —
- Go to Coverage Pools — Deposit section in Keep Dashboard. Enter the amount of covKEEP (not KEEP) you would like to withdraw and click ‘WITHDRAW’.
2. You will be prompted with a pop-up about cooldown period which is 21 days before you can fully withdraw your KEEP tokens. Confirm by clicking the checkbox and click ‘WITHDRAW’.
3. You will be prompted with the first MetaMask popup to confirm the transaction. Click ‘Confirm’ and wait for transaction to be confirmed. This is a approval transaction to allow spending of collateral token covKEEP in Keep Dashboard.
4. You will be prompted with the second MetaMask popup to confirm the transaction. Click ‘Confirm’. This will spend the collateral token covKEEP.
5. Once confirmed, Keep Dashboard will show you the status that you have initiated the withdrawal and you are in 21 day cooldown period.
6. You can monitor time left to completely claim your tokens in Keep Dashboard — Coverage pools — deposit under pending withdrawal section.
7. After 21 days, ‘CLAIM TOKENS’ will be activated in Keep Dashboard — Coverage pools — deposit under pending withdrawal section for 2 days.
8. Click ‘CLAIM TOKENS’. You will be prompted with the below popup confirming you have passed the 21 day cooldown period, click ‘CLAIM’.
9. You will now be prompted with MetaMask popup to confirm the transaction. Click ‘Confirm’.
Wait for your transaction to be confirmed and this concludes the withdrawal process and you should have received your deposit and rewards KEEP tokens in your wallet.
Withdrawal Timeout : —
If you do not withdraw/Claim your tokens within 2 days after 21 day cooldown, you will have to re-initiate the withdrawal. If you ever go into that situation, here are the steps to follow.
Go to Keep Dashboard — Coverage pools — deposit section and you will see ‘RE-INITIATE’ under pending withdrawal section. Click ‘RE-INITIATE’ to activate the cool down period again.
If you have any further questions — please feel free to join the Threshold Discord Server and ask !