The public nature of a blockchain is by design; as a verifiable public ledger all transactions are published to the blockchain. By default every transaction can be seen by everyone, including “competing interests.” The Keep protocol was developed to bridge the worlds of secure private data and public blockchains.
With Keep, small amounts of sensitive data, such as private keys, can be stored off-chain but used in smart contracts on-chain in a trustless manner. The trustless component is possible due to the development of Keep’s Random Beacon, a source of true randomness that makes collusion virtually impossible.
Keep’s other major innovation is its ability to allow private data, held off-chain but stored online in nodes, to be used extensively on a public blockchain. The containers holding this data (keeps) can be created for a variety of functions such as proxy re-encryption. Keep is well-positioned to address the privacy needs that would enable broader adoption of public blockchains with private data.
Keep is bridging the gap across blockchains by allowing tokens to be moved between protocols. For example, because the Bitcoin blockchain wants to remain simple and secure, it has been difficult for people to use Bitcoin for financial transactions such as collateral for a loan or to interact with DeFi like Ethereum. To address this, Keep has developed a way to securely use Bitcoin on other blockchains (starting with Ethereum) without losing the features of Bitcoin which make it desirable as cryptocurrency.
Keep is a Layer 2 privacy layer for Ethereum. It takes pieces of information, breaks it up into chunks, stores these chunks with different node operators, and allows the data owner to put those chunks back together as needed.
For example, a private key can be broken up and stored in pieces, only to be put back together when the data owner needs it for an activity such as sending a transaction or signing a message. A random individual cannot access the data, unless they colluded with others to defraud the network. Even then, the network has established rules that penalize the defrauders, costing them more in ETH than they would gain in BTC.
These are the fundamental concepts to understand about the Keep network:
TBTC is a 1:1 Bitcoin-backed ERC-20, the first token to be minted via a decentralized protocol; one TBTC can be redeemed for 1 BTC. Because it is Bitcoin on Ethereum, not the price of Bitcoin on Ethereum, this token allows Bitcoin to be used in Decentralized Finance (DeFi). TBTC is only possible because of the innovations within Keep that allow for private keys to remain secret while also participating on a public blockchain.
"Storing private data securely to be used in smart contracts is a noteworthy innovation from the Keep team. TBTC as a trustless decentralized asset, has tremendous potential to finally unlock DeFi applications for BTC by moving it onto Ethereum. We're thrilled to support Keep on our infrastructure platform and look forward to a lot of participation in Keep's Stake Drop." —Aaron Henshaw, CTO and Cofounder of Bison Trails
To mint a TBTC token with BTC, the network must complete a multi-step process.
First the Keep network creates an address for the depositor to put her BTC:
Next the depositor adds her BTC:
To get her BTC back:
For the first 4 months (starting in June 2020), there will be a supply cap on tBTC (Month 1 = 100 tBTC, Month 2 = 250 tBTC, Month 3 = 750 tBTC, Month 4 = 1000 tBTC). In month 5 there is no cap.
TBTC functions in a two-sided marketplace. As with most financial products, TBTC needs usage and liquidity to be useful. First and foremost, there have to be BTC deposits and ETH stakers.
To facilitate reaching critical mass, the Keep team plans to heavily incentivize participation in the first 12-18 months. Stake Drop is a mechanism by which users with ETH, but no KEEP, can stake and participate in the Keep network, and be rewarded with KEEP and signer fees.
The first two months of the Stake Drop represent the peak distribution of rewards, favoring active participants who are ready to earn rewards on May 13.
For the first 6 months, participants only need to stake ETH and are not obligated to have KEEP. However, as the Keep team has modified its rewards structure so that rewards are based on the amount of ETH locked and KEEP staked over time, staking KEEP during this period substantially increases the probability of earning rewards. After 6 months, they will also need to stake KEEP to continue participating but will likely have earned enough from rewards to do so. (If you are interested in participating in Stake Drop and want to talk this through with our protocol experts, please feel free to contact us.)
The Keep team is allocating 5% of KEEP tokens (50m KEEP // $6m USD) as a liquidity reward to incentivize tBTC owners to add tBTC to DeFi trading and liquidity protocols (e.g., Uniswap). This reward furthers tBTC adoption and makes it easier for liquidators to service deposit liquidations. Further details will be released by the Keep team soon!
KEEP - Native work token
ETH - Used as collateral to make TBTC and to pay for tx fees on Ethereum
BTC - Used as the initial deposit in the minting of TBTC
TBTC - The ERC-20 token that is a representation of Bitcoin on Ethereum
TDT - The ERC-721 non-fungible token that represents a Bitcoin deposit
|Total Initial Supply||1 billion|
|Total Planned Subsidies||25% or 250m of the 1bn will be distributed as a subsidy in the first 24 months (200m in the Stake Drop and 50m for the Liquidity Reward).|
|Maximum Token Supply||1 billion|
|Token Price at Sale||$.12|
|Inflation Rate||No inflation|
|Maximum Stake||No maximum|
|Minimum Stake||100,000 KEEP ($12k USD). Will decrease over time on a predictable schedule. Not published yet.|
|Lock-up Period||Signer fee earnings in ETH or TBTC do not have any locks on them|
|Unbonding / Undelegating period||60 days for KEEP tokens
0 days for ETH (if the TBTC you helped create is redeemed)
Because KEEP is a work token, and the entire token supply exists at launch, the network does not have an inflation rate. Keep plans to incentivize mass participation from the start, rather than over the first few years, by using Stake Drop to distribute KEEP.
Through Stake Drop, 20% of KEEP tokens (200m) will be distributed as a subsidy to participants running the TBTC keep as well as the Random Beacon keep. This will ensure enough ETH is staked on the network and will reward users for nodes running the TBTC keep more than those only running the Random Beacon keep. The full subsidy details are here, courtesy of the Keep team.
Bison Trails was one of the first outside providers spinning up nodes on Keep; we started in June 2019. Since then we have provided feedback that resulted in protocol parameter changes for infrastructure uptime requirements and made the first feature addition not by the Keep team to improve how their infrastructure is configured. Our pull request was merged here.
“The Bison Trails team is phenomenal. They've been deeply committed to Keep, and have been a huge help moving our protocol design and development forward. The Keep network requires an abundance of reliable, distributed, and secure nodes, making Bison Trails a strong partner and a great choice for Keep token holders and anyone joining our Stake Drop on June 8th.” —Matt Luongo, CEO at Thesis / Keep Network’s Project Lead
Our platform is purpose-built to run multiple nodes securely and reliably —perfect for a work token network like Keep that needs node diversity and high availability. In addition, there are three roles, with a related address, used for the set up and management of a Keep node:
This delineation allows using non-custodial infrastructure providers to run your node, such as Bison Trails, to be a simple and straightforward process. Contact us with questions about the Keep protocol or to get started running a Keep node.
Bison Trails is a blockchain infrastructure company based in New York City. We built a platform for anyone who wants to participate in 20 new chains effortlessly. We also make it easy for anyone building Web 3.0 applications to connect to blockchain data from 30 protocols with QT. Our goal is for the entire blockchain ecosystem to flourish by providing robust infrastructure for the pioneers of tomorrow.
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