Figment’s First Look: Keep Network
The Keep Network mainnet is launching and staking will begin on May 4, 2020. The easiest way to stake will be to delegate to a Keep operator, such as Figment. Join our Staking Hub AMA on Friday, April 24 at 16:00 UTC.
What is Keep?
The Keep Network will enable privacy options for Ethereum applications and users. “Keeps” will hold small amounts of data in the secure, distributed Keep Network, which is launching with two core applications.
Keep’s Core Application: The Random Beacon
The Random Beacon will provide a source of verifiable randomness. No one, including the signers, knows who the signers will be they are selected by the Random Beacon. Why is this randomness important? Signers are unable to collude to steal funds or to attack the network.
tBTC will use the Random Beacon
The tBTC application will leverage Keep’s ability to keep small amounts of data enable the network to store a private key without revealing the key to anyone. A system of signer groups will process transactions without a trusted middleman, and will act as a bridge to enable Ethereum smart contracts to trustlessly sign Bitcoin transactions. What makes tBTC important?
tBTC will bring the value of Bitcoin to Ethereum’s DeFi ecosystem
tBTC will let Ethereum smart contracts lock BTC on the Bitcoin Network and mint Ethereum-based tBTC tokens, which will be backed by real BTC. You may think this already exists, but not without trusted parties being involved. How?
Using secure multi-party computation, smart contracts will communicate cross-chain by signing transactions between chains using distributed threshold signers. Decentralized transaction signing will be performed using private keys without revealing them. Responsibility for signatures is divided, requiring a threshold number of participants to create a signature using their key shares.
Beyond Bitcoin and Ethereum, it’s possible we will see Keep Network also functioning on Cosmos, Zcash, and Polkadot as well.
Beginning May 4, 2020, you will be able to begin earning Keep staking rewards. The easiest way to stake KEEP tokens is to delegate, and you can do that with the Figment team. Figment will provide instructions, support, and information about the risks involved: email@example.com
If you want to take a more hands-on approach, check out the Keep team’s token dashboard for the testnet. You can test out:
- Claiming your token grants
- Setting up the different roles (authorizer, operator, beneficiary) for staking
- Delegating stake to an operator (staking provider)
- Tracking and accepting rewards
Staking KEEP and Bonding ETH
There a two opportunities for earning rewards: 1) staking KEEP and 2) bonding ETH.
If you stake KEEP, you will earn ETH transaction fees, and for the first 12 – 18 months you’ll also earn a KEEP token subsidy. 2% of the supply has been earmarked to subsidize early stakers.
You don’t need KEEP to participate, and you can earn KEEP tokens just by bonding ETH. Depending on how involved your operator is, if you bond ETH you can earn tBTC. tBTC will be an Ethereum token backed by real BTC, and Figment will be participating in tBTC. Additionally, 18% of the KEEP token supply has been earmarked to subsidize early ETH bonders for the first 12 – 18 months.
The more ETH you bond and/or KEEP you stake with our Keep operator, the more rewards and transaction fees you will earn. However, you’ll only earn KEEP tokens for a limited time, since Keep’s token supply will be non-inflationary, so early staking/bonding will be important for maximizing your rewards.
Evaluating Participation Risks and Rewards
The staking and bonding processes are non-custodial, meaning that an operator never controls your tokens, which are locked in a Keep Network smart contract. Your bonded and staked tokens may be slashed, but only seriously malicious behaviour will be punished by Keeps, so it is very unlikely that any professional operator will be accidentally slashed. However, risk management is important to us, so we will provide our clients with risk/reward models to assess the value of staking.
Curious to learn more? Join us for an AMA with the Keep team!
Hopefully you found this useful. Questions? Comments? Feedback is always welcome! I’m on Twitter.