Keeper

In blockchain architecture, a Keeper is an external, permissionless actor that provides a critical oracle and execution service for DeFi protocols and other smart contracts. Its primary function is to perform routine maintenance tasks—such as liquidating undercollateralized loans, triggering limit orders in decentralized exchanges (DEXs), or initiating insurance claim payouts—that are economically unfeasible or technically impossible for the smart contract to perform autonomously. By submitting the necessary transaction with the correct calldata, the Keeper finalizes an action that the protocol's logic has already determined should occur.

The economic model for Keepers is typically incentive-based, operating on a gas-cost-plus-reward system. When a Keeper's monitored condition becomes true (e.g., a loan's collateral ratio falls below a threshold), the Keeper broadcasts a transaction to execute the corresponding function. The smart contract pays the Keeper a pre-defined reward from its treasury or from the proceeds of the action (like a liquidation penalty), which must exceed the cost of the gas fees incurred. This creates a competitive, decentralized marketplace where multiple Keepers race to be the first to perform profitable tasks, ensuring network liveness and reliability.

Prominent examples include Keep3r Network, which is a decentralized keeper job marketplace, and Chainlink Keepers, which provides a robust, decentralized network for automation. These systems abstract away the complexity of running reliable off-chain infrastructure, allowing developers to specify upkeep jobs via smart contracts. The role of a Keeper is distinct from a validator or miner; it does not participate in consensus but is essential for the composability and advanced functionality of modern DeFi ecosystems, automating time-sensitive and conditional logic that is fundamental to their operation.

In decentralized finance (DeFi) and broader Web3 applications, many smart contracts require timely, external execution to function—such as liquidating an undercollateralized loan, rebalancing a liquidity pool, or settling a limit order. A keeper (also known as a keeper bot, searcher, or automation bot) is an off-chain service that constantly monitors the blockchain for these triggering conditions. When a profitable or necessary opportunity is identified, the keeper submits the required transaction, paying the necessary gas fees to the network. This role is critical because standard smart contracts cannot initiate actions on their own; they require an external Ethereum Virtual Machine (EVM) call to transition between states.

The keeper ecosystem operates on a permissionless and competitive model. Multiple keeper services typically monitor the same opportunities, creating a gas auction where they compete to have their transaction included in the next block. The keeper that submits the transaction with the highest gas price is usually prioritized by miners or validators. This competition ensures execution speed and reliability but also means keepers must carefully calculate their potential profit (e.g., a liquidation bonus or protocol fee) against their gas costs and the risk of being outbid. Major protocols like MakerDAO, Aave, and Compound rely on this decentralized network of keepers to maintain the health of their lending markets through automated liquidations.

Technically, a keeper's workflow involves several key components: a listener that subscribes to blockchain events via a node or indexing service, a strategy engine that evaluates if predefined conditions are met and calculates potential profit, and a transaction manager that constructs, signs, and broadcasts the transaction. Advanced keepers may employ MEV (Maximal Extractable Value) strategies, such as arbitrage or sandwich attacks, to maximize revenue. Services like Chainlink Keepers and Gelato Network provide standardized infrastructure, allowing developers to outsource keeper logic without running their own bot infrastructure, thereby enhancing security and reliability for decentralized applications.

In blockchain ecosystems, a keeper is a critical piece of infrastructure that performs essential but often unglamorous tasks to maintain protocol health and functionality. These tasks—such as liquidating undercollateralized loans, initiating limit orders in decentralized exchanges, rebalancing liquidity pools, or settling options contracts—are triggered by specific on-chain or oracle-reported conditions. By automating these functions, keepers ensure that decentralized applications operate efficiently and according to their programmed logic without relying on a centralized operator. Their role is analogous to arbitrageurs or market makers in traditional finance, but they operate in a trust-minimized, code-first environment.

The incentive mechanism for keepers is typically a fee or reward paid in the network's native token or a share of the transaction's value. For example, in a lending protocol, a keeper that successfully liquidates a position may receive a percentage of the collateral as a bounty. This creates a competitive, permissionless market where multiple keepers monitor the blockchain for profitable opportunities. The first keeper to submit a valid transaction that meets the protocol's conditions claims the reward. This system aligns economic incentives with protocol security, as it ensures that necessary but potentially costly actions (like paying gas fees for liquidation) are performed promptly to protect the system's solvency.

Technically, a keeper's operation involves constant blockchain monitoring via node connections, gas price optimization to ensure transaction profitability, and sophisticated transaction bundling or MEV (Maximal Extractable Value) strategies. They are not a native protocol feature but an emergent layer of economic actors. Prominent examples include keepers in MakerDAO's liquidation system, keepers for Chainlink's decentralized oracle networks which help maintain data feeds, and keepers in perpetual futures protocols like dYdX. The reliability of a decentralized application often depends on the robustness of its keeper ecosystem, making their design a key consideration in DeFi (Decentralized Finance) mechanism design.