KeepSurance? Alternative use of the Keep token.
What associations do you get when you hear the word “Keep”? I think the words like: save, carry, store, hold.
Today I came up with the idea of how to develop the Keep Network infrastructure. The current rapid growth of DeFi projects and the growing interest in it exponentially implies certain risks. At the moment, almost $ 9 billion is already locked in DeFi. And the moment You read this, I think it’s more.
Of course, with such a rapid development of the ecosystem, countless scams will appear. This can negatively affect the overall credibility of projects. And at this point, anyone has a desire to secure their capital locked in DeFi, in order to avoid losses. There are already similar offers on the market, but they are currently strictly limited to one offer from Nexus Mutual and perhaps now is the right time to create additional competition in the insurance market.
However, first of all, I would like to reflect on the use of the Keep insurance token, let’s call it KeepSurance (“sKEEP”), primarily within the Keep Network ecosystem. Accordingly, sKEEP must be without the initial distribution, and it can only be obtained by swapping the original KEEP token. In turn, this will also have a positive impact on the price of the KEEP token. In essence, this will be something like burn of part of supply. Primarily, sKEEP should be useful for node operators and stakedrop participants. What can this token be used for? Let’s look at some examples.
- As far as we know, there are several risks for node operators and stakedrop participants. One of them — “Signer failure for Random Beacon node”. Half of a signing group (32 nodes) must sign for a signature to be successful. As long as at least 32 nodes sign successfully, no one will be slashed. However, because the network can not attribute fault, all nodes in the group are penalized equally if a signature fails. Slashing will be as follows after launch:
• 1% of the minimum stake for the first 3 months
• 50% of the minimum stake between the first 3 and 6 months
• 100% of the minimum stake after the first 6 months
So the idea is that when buying an insurance token sKEEP - avoid slashing or reduce penalties for it. Here you need to think carefully about tokenomics, and everyone needs to decide whether they need the sKEEP token or not. But there will be time for this — at least 3 months, after the launch of the mainnet, while slashing will be only 1% of the steak. After three months, I think many people would like to have additional insurance in the form of a sKEEP token.
2. Another one risk is “Signer failure for tBTC” If you haven’t signed the transaction within 3 hours — bonds are seized and auctioned off for tBTC so that the user can be reimbursed for their inaccessible funds, and half of the remainder of the signer bonds (a maximum of 1/6th of the original bond) are returned to the signers. I think this is also suitable situation to be able to use the insurance token and return some of the funds back.
Alternatively, after using the sKEEP token for insurance coverage, it can be burned, which in turn will reduce the total supply of the KEEP token.
3. Signer fraud. In this case, no insurance will help you avoid punishment, because this action is performed intentionally.
Perhaps not all ideas are relatable, but in any case, I think it is possible to develop in this direction and the KEEP NETWORK ecosystem itself favours this.
In case of successful testing within the KEEP platform, you can expand the sKEEP token’s user cases in the future - provide the possibility of insurance against slashing in other projects, as well as of course-insurance against losses of deposited funds in the DeFi ecosystem at all.
It seems to me that this is really a great alternative use of the token, which will have a positive impact on the ecosystem.
By the way, while I was writing this article, the amount of locked funds in DeFi exceeded 9 billion…