One article to understand why Web3 projects need to be automated in a decentralized manner

The blockchain ecology has developed from a simple on-chain token to a series of advanced decentralized applications, and the underlying technology of these applications is hybrid smart contracts. However, there is a key problem with smart contracts, that is: the blockchain adopts a closed-loop architecture to ensure security. Because of this, smart contracts on the chain cannot be automatically executed. That is, contracts cannot run automatically based on predefined conditions, such as executing contract functions when the token reaches a certain price, the loan collateralization ratio falls below a certain threshold, or reaches a certain time. If smart contracts cannot be executed automatically, many advanced use cases cannot be realized.

In order to solve this problem, some developers have adopted centralized automation solutions; some developers have directly set incentives in the protocol to trigger specific contract functions through external parties. However, there are huge hidden dangers in doing so, and it will threaten the security guarantees on which the applications on the chain depend. For example, the incentive mechanism of the Ethereum Alarm Clock is the earliest smart contract automation solution, and this mechanism also leads to some transactions that may not be executed at all.

And now Chainlink has launched a highly secure decentralized automation solution, Chainlink Keepers. Developers can use it to automatically trigger smart contract execution without deploying centralized bots or triggering contracts through incentive mechanisms. Chainlink Keepers can automatically execute smart contracts very reliably, while maintaining cost-effectiveness and a level of decentralization. Currently, Chainlink Keepers have automatically triggered tens of thousands of transactions.

As such, Chainlink Keepers are an integral element of the Web3 infrastructure, and developers can use Keepers to automate smart contracts, creating feature-rich dApps, decentralizing end-to-end, and realizing the full potential of Web3.

Use a centralized solution to automate the problems of smart contracts

Adopting a centralized solution to automatically execute smart contracts may bring a series of security risks to dApps, and will further stretch the already limited smart contract development resources.

Chainlink Keepers have many advantages over centralized solutions.

single point of failure

Using a centralized solution to automate smart contract functions may result in a single point of failure, where the protocol may be manipulated and technically malfunctioning. Whether by running a script on a centralized server or manually monitoring and invoking an on-chain contract by a DevOps team, there is a risk of a single point of failure that can lead to protocol insolvency, transaction slippage, and loss of user funds. In the final analysis, centralized solutions make smart contracts have to rely on an external party, and they cannot reach the level of smart contracts in terms of security, reliability, or transparency.

In addition to security concerns, unstable runtime is also the biggest problem that DevOps teams face when adopting centralized solutions. For example, centralized cloud service providers repeatedly went offline, causing many dApps to access their services to be interrupted. End users suffer from being unable to use dApps, which ultimately damages the reputation of the protocol.

waste time

The resources and time required to develop and run a centralized automation solution often exceeds most people’s expectations. For example, if you use Web2 technologies such as cloud-based job schedulers or cron job smart contracts to develop a centralized automation solution, you need to carry out a series of complex tasks, such as viewing Transactions per block, listening for events, responding to on-chain reorgs and alerting when token balances fall below a certain limit, etc. In addition, you also need to deal with the problem of RPC not responding, which is especially a headache for multi-chain applications. In addition to this, multi-chain applications may also require separate development of automation infrastructure for each deployed blockchain.

All of this work consumes a lot of development time and resources that should be devoted to feature development and customer acquisition.

private key leaked

Keeping private keys safe is critical for smart contract developers. However, when developers use centralized services to trigger transactions, private keys may be leaked. Since only the holder of the private key can access the funds stored in the addresses on the blockchain on the blockchain, the disclosure of the private key will pose a huge security risk to the protocol treasury.

Issues with using a public bounty mechanism to automate the execution of smart contracts

In addition to adopting a centralized automation system, there is another way to embed the automatic execution function directly into the protocol and establish a bounty mechanism. When certain conditions are met, the first automated bot to call the on-chain function earns a bonus.

Chainlink Keepers are more reliable, cost-effective and more decentralized than this public bounty mechanism.

Unreliable

It is especially difficult for developers to maintain the balance of the bounty mechanism. If the bounty is set too low, the smart contract function will never be called; but if it is set too high, it will hit the protocol again.

A public bounty mechanism cannot guarantee the robustness of automated bot operations. In some extreme cases, such as when the market fluctuates violently or the network is severely congested, the protocol has the highest requirements for the robustness of bot operation, but often at such times, automated bots may avoid high gas fees or because of insufficient funds. and stop running. This may result in user transactions not being executed at all.

This problem is especially deadly for DeFi protocols, which need to manage liquidity, and execution problems in the automated process can lead to insufficient loan collateralization, and ultimately lead to insolvency and loss of user funds.

cost rise

Another problem with automated bounties is that it increases the cost of running the protocol. The dApp needs to set aside a portion of the revenue to pay the bounty to the first bot to call the function. As the competition for automated bots adopts a “winner takes all” model, the price war in the Priority Gas Auction (PGA) will also intensify, so the cost will also increase. In order to win the bounty, automated bots will find ways to let the blockchain miner process their own transactions first, so they are willing to pay higher gas fees. Doing so will drive up the total cost, since most keeper tasks include a base fee plus gas fee.

Ultimately, these costs fall on the end user, so the user has to pay more. To effectively solve the above problems, the protocol can use Chainlink Keepers, keeping more interest in the protocol and the vault.

Centralized bot network

Public bounties will eventually lead to centralization problems, with well-funded automated bots launching gas price wars to crowd out other competitors and monopolize the market. As a result, the number of automated bots monitoring and submitting transactions is decreasing, which can seriously affect the reliability of the dApp.

Four reasons why developers should choose Chainlink Keeper to automatically trigger smart contracts

Chainlink Keepers can unlock a range of smart contract automation use cases for developers and offer several advantages over the above solutions.

Chainlink Keepers enable greater levels of security, decentralization, and cost-effectiveness.

higher security

Chainlink nodes perform operation and maintenance tasks in a trust-minimized manner, and developers and users can be confident that their smart contracts will be executed strictly as agreed, and will never be manipulated by any outside party. Keepers adopts a decentralized infrastructure, which can effectively ensure that user-defined service agreements are executed on the chain.

The node will personally sign the transaction on the chain, so the private key can be guaranteed not to be leaked during the automatic execution process. Doing so can effectively avoid the biggest risks of centralized automation solutions and improve the security of the entire protocol.

High degree of decentralization

Chainlink Keepers use Chainlink’s decentralized oracle network to perform operation and maintenance tasks, which means that the nodes used by Keepers also secure tens of billions of dollars in value for DeFi applications, and Keepers has the same high level of performance as the decentralized oracle network. Excellent Sybil resistance and tamper resistance. Multiple Keepers are deployed on each blockchain, and a node rotation screening mechanism is established to improve redundancy and fully ensure the level of decentralization.

higher efficiency

Chainlink Keepers has set up multiple gas fee optimization functions, including a node rotation screening mechanism, which can effectively avoid PGA price wars and reduce costs for end users. Keepers can also save DevOps teams hundreds of hours and improve project efficiency. Developers can integrate the Chainlink Keepers infrastructure into a Keeper-compatible smart contract, and register an operation and maintenance task, and the contract can be automatically executed when the predefined conditions are met. This allows projects to devote these resources to the development and improvement of the protocol.

Reliable and long-term sustainable

Chainlink Keepers function well even when the network is extremely congested and gas fees skyrocket, and are not affected by the downtime of centralized infrastructure like centralized solutions. Keepers are also able to successfully trigger liquidations when the market is volatile, maintain the solvency of the protocol, and provide solid support for many other use cases.

Chainlink Keepers provide key infrastructure for decentralized applications, enabling rich application functions

One of the core advantages of smart contracts is security through decentralization. And centralized automation solutions lead to a single point of failure, so this key advantage also disappears. If a dApp can be manipulated by one party, how can it keep millions of dollars safe? Whether it is a direct attack by hackers or internal manipulation, these security risks should be eliminated in the core infrastructure of Web3.

Chainlink Keepers enable developers to build automated dApps without relying on centralized servers and are a core pillar in the Web3 infrastructure. Chainlink Keepers are an integral part of developing trust-minimized and fully decentralized advanced dApps, a feature that the entire Web3 community and end-users have come to expect.

If you want to integrate Chainlink Keepers into your dApp, start using Chainlink Keepers today or check out the technical documentation.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/one-article-to-understand-why-web3-projects-need-to-be-automated-in-a-decentralized-manner/
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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