Background about KEEP –
The Keep Network is a privacy layer for Ethereum (more blockchains to come in future) that allows users and applications to store data privately. It creates a bridge between the public blockchain and private data. It features off-chain containers for private data called keeps (aka private enclaves) to securely encrypt and store private data offchain. The protocol takes pieces of information, breaks it up into chunks, stores these chunks with different node operators, and allows the data owner to put those chunks back together as needed. The network randomly assigns keeps to a system of participants, called signers, that help store and manage these data containers. It uses Distributed Key Generation (DKG) cryptographic process in which multiple parties contribute to the calculation of a shared public and private key set. With this system, each signer is given access to a small portion of a secret which is encrypted. This process prevents single parties from having access to a complete private key. These off-chain keeps will be protected using secure multiparty computation (sMPC) across many individuals (nodes/signers). Each participant(signer) stakes KEEP tokens and ETH to act as a signer in exchange for a service fee and KEEP token rewards. The first dAPP for keep is TBTC — bringing Bitcoin to Ethereum.
Background about TBTC –
TBTC is a trustless bridge between Bitcoin and Ethereum blockchains. Signers facilitate the exchange and storage tasks of swapping BTC for Ethereum-compatible (ERC-20) TBTC tokens so BTC holders can access Ethereum’s decentralized finance (DeFi) sector. TBTC is a fully Bitcoin-backed ERC-20 token pegged to the price of Bitcoin. Every TBTC is backed 1:1 with BTC. It is Permissionless — redeem TBTC for BTC at any time. It is Secure — audited and open source. Simple steps to convert BTC to TBTC and TBTC to BTC. Censorship and seizure resistant, across friendly and unfriendly jurisdictions. TBTC may only be minted after proof is provided of a backing BTC deposit, in other words, TBTC would exist only if BTC deposit exist in keep. The amount of TBTC minted is equal to BTC amount removed from circulation.
There is certainly a lot more we can talk about KEEP protocol and TBTC but I focus more on Stakedrop here.
What is Stakedrop –
StakeDrop is a mechanism by which users with ETH, but with or without KEEP, can stake and participate in the Keep network, and be rewarded with KEEP tokens and signer fees. The stakedrop will allow people with no KEEP to act as TBTC signers using only their ETH, with the corresponding KEEP tokens “dropped” to them as a reward over time.
How to Participate in Stakedrop –
First off — you MUST run a Node and MAINTAIN a node. If this is not something for you, you are better off buying KEEP tokens directly if you believe in the project.
There are two ways to participate :
- Random Beacon Node — you stake KEEP tokens and run the Random Beacon node. If you do not have enough KEEP, you cannot participate in Random Beacon Node. Minimum required KEEP to stake is 70k KEEP.
- ECDSA Node — stake KEEP and bond ETH running the ECDSA node (TBTC system). For ECDSA node, the first 6 months there are 2 options — ETH only option and KEEP + ETH option. Minimum required KEEP to stake in KEEP + ETH option is around 70k KEEP. Else it will be ETH only option where many will fall under. For the first 6 months, participants only need to stake ETH and are not obligated to have KEEP, although staking KEEP during this period substantially increases the probability of being selected to perform work and earn rewards. After 6 months, they will also need to stake KEEP to continue participating as signers.
You can participate in one or both using the one minimum stake.
When can you participate in Stakedrop –
KEEP + ETH option is open and been live since Sept 14th.
ETH only option entered audit around Sept 27th and expected to take ~5 weeks (tentative). This will become live after audit is completed.
How much rewards can I earn (farm) participating -
The Keep team plans to incentive participation in the first 12–18 months for mass adoption by subsidizing the rewards during stakedrop. There are multiple reward pools, see below.
Stakedrop — Random Beacon rewards –
This will be applicable if you are running Random Beacon node by staking KEEP. You’ll earn a fee in ETH per each completed transaction (between 10–50$) plus KEEP staking subsidy which is 2% (20 million KEEP) of the total KEEP over the course of stakedrop period.
Stakedrop — ECDSA rewards –
This is applicable if you are running ECDSA node and for both options — KEEP + ETH option or ETH option. You’ll earn a fee of 5 bps per Bitcoin deposit. This fee increases overtime to 2–4%. On top of fees, there is also a staking subsidy of 18% (180 million KEEP) of total KEEP over the course of stakedrop period. Staking in KEEP + ETH option would increase rewards by 11% over ETH-only staking option during the Stakedrop and would also increase the node’s chance of being selected to create TBTC by 20–30%.
Here is how the Stakedrop rewards look like –
Liquidity rewards –
The Keep team is allocating 5% of KEEP tokens (50 million KEEP) as a liquidity reward to incentivize TBTC owners to add TBTC to DeFi trading and liquidity protocols (e.g., Uniswap). This reward furthers TBTC adoption and makes it easier for liquidators to service deposit liquidations. More details to be announced soon on this.
To answer a burning question on how much can 1 ETH earn/farm — Nobody knows the answer on how much the rewards are going to be. It all depends on how many people participate and how much gets staked. Put it other way, less people stake, more the rewards and vice versa.
Edit:
For Interval 1 — there was ~1700 KEEP rewarded for each deposit.
Source — https://agoristen.medium.com/keep-network-interval-1-aftermath-e5690f3bbd1f
For Interval 2 – there was ~3500 KEEP rewarded for each deposit.
Source – https://allthekeeps.com/stakedrop
For Interval 3 — reward structure has changed. It is now more focused on bring in more ETH to the system.
Read here for details — https://blog.keep.network/a-new-rewards-mechanism-deef3412c3e1?gi=233f905baf92
Interested ? continue to how to stake.
How to Stake (run a node) –
Staking with dAPP (most people will probably do this) –
The Keep Token Dashboard handles everything you’ll need to manage your token grants, staking delegation, and rewards. You run a node and manage everything. There are multiple guides on running a node.
Dashboard link —
https://dashboard.keep.network/ (Mainnet)
https://dashboard.test.keep.network/(Ropsten)
There are many guides for running a node –
Staking with a provider:
Keep has already partnered with multiple staking providers and please contact the below people for details depending on your staking provider.
- Bison Trails, Viktor Bunin (viktor@bisontrails.co)
- Staked, Tim Ogilvie (togilvie@staked.us)
- Figment Networks, Yannik Folla (yannick@figment.network)
- Blockdaemon, Konstantin Richter (konstantin@blockdaemon.com)
- Boar, Piotr Dyraga (hello@boar.network)
Risks —
- Call limits — If using Infura, it has 100k calls/day limit (free tier) and this could get exhausted and your node could get locked out of network. Burning 100k calls in a day is not hard depending on the demand for TBTC. Check other options — https://chainstack.com. Running own ETH node(preferred) mitigates this risk. Or if you are not comfortable, go with staking provider option.
- Smart contract bug
- One of the signers in your group fails to respond to a redemption request
- Your signer group gets liquidated from under-collateralization
- Your group provides a fraudulent signature
More details here on risks and risk mitigation strategies.
Preparing yourself to stake –
- Keep your ETH (and/or KEEP) ready
- Practice running a node on test net
- Understand the risks.
- Ask questions on discord.
Additional resources :
- Keep’s: Discord
- Keep’s website: https://keep.network/
- Keep’s: GitHub
- Keep’s staking: https://keep-network.gitbook.io/staking-documentation/
- Bison Trails: https://bisontrails.co/keep-stake-drop/
- Keep’s Messari report: https://messari.io/asset/keep-network
