Smart Contract Automation Use Cases Unlocked by Chainlink Keepers

Bob Coiney

February 11, 2022

Smart contracts are simply programs stored on a blockchain that run when predetermined conditions are met. They typically are used to automate the execution of an agreement so that all participants can be immediately certain of the outcome, without an intermediary’s involvement or time loss. They can also automate a workflow, triggering the next action when conditions are met. Smart contracts work by following simple statements that are written into code on a blockchain.

A network of computers executes the actions when predetermined conditions have been met and verified. The blockchain is then updated when the transaction is completed. That means the transaction cannot be changed, and only parties who have been granted permission can see the results.

Chainlink Keepers is a decentralized transaction automation solution that enables smart contracts to automate key functions and DevOps tasks in a highly reliable, trust-minimized, and cost-efficient manner. Individual developers, teams, and DAOs can utilize Chainlink Keepers as an off-chain computation layer to reliably automate key functions and unlock advanced utility. A wide-ranging collection of prominent DeFi applications are already powered by Chainlink Keepers, while many development teams are actively working on integrating Keepers into their protocols.

Why Smart Contracts Need Decentralized Automation 

One key feature about smart chain contracts which have been overlooked over time is that they cannot trigger their own functions. Rather than the former, they need to be triggered by an external entity through an on-chain transaction to run certain functions. While some protocols such as automated market makers (AMMs) can rely on users to initiate transactions to wake up the contract, many smart contracts need an external entity known as a “keeper” to monitor predefined conditions and trigger the contract when those conditions are met. Such conditions can include reaching a specific moment in time, the occurrence of a specific event, or the execution of complex off-chain computation.

Chainlink Keepers enable extensive smart contract automation use cases, ranging from basic automation and DevOps tasks such as replacing a centralized script to advanced off-chain computation to enable gas savings, security, or confidentiality. Crucially, Keepers unlock entirely new decentralized functionality that wasn’t previously possible in the blockchain ecosystem, with even more use cases enabled when Keepers are combined with other Chainlink services such as Chainlink Price Feeds and Chainlink VRF.

From automating yield harvesting (an on-chain transaction which is required to claim rewards from a yield-generating vault as smart contracts cannot trigger their own functions wherein they need an external entity to trigger an on-chain transaction to run their coded logic) to setting DEX limit orders which enables peer-to-peer marketplaces that fosters seamless transactions without intermediaries. 

More so, it also releases tokens. In this case, the beauty of decentralized financial applications comes in a form where strategists and developers can create fully-fledged asset allocation strategies that can autonomously execute a predefined plan of action codified into a deterministic smart contract, making the possibilities limitless.