Off-Chain Keepers
Off-chain keepers are automated agents or bots that perform routine tasks for decentralized protocols, such as triggering liquidations, updating price feeds, or executing batch transactions. Since smart contracts cannot initiate their own actions, they rely on these external entities to interact with them at the right time.
In a derivatives platform, keepers play a vital role in ensuring that liquidation engines operate promptly, which is crucial for preventing bad debt. These keepers are incentivized through rewards, often in the form of a portion of the liquidated collateral or a fee paid by the protocol.
While they improve the efficiency and responsiveness of the system, they also introduce a dependency on an off-chain infrastructure. If the keepers fail or are unavailable, the protocol's critical functions may stall.
Therefore, protocols often aim to decentralize their keeper networks to ensure robustness and prevent any single entity from having too much control or the ability to censor transactions. Managing the incentive structure for keepers is a key challenge in protocol design.