88mph Using Chainlink Keepers to Automate our On-Chain Interest Rate Updates
88mph is excited to announce that we have integrated Chainlink Keepers live on Ethereum mainnet. Chainlink Keepers is a decentralized service that uses secure, low-cost off-chain computation to monitor predefined events and call on-chain functions when such events occur. In our initial integration, 88mph is leveraging Chainlink Keepers to automate the update of our on-chain interest rates — effectively eliminating manual processes while enhancing reliability to create a truly set-and-forget experience for users.
We decided to implement Chainlink Keepers because it is a decentralized network run by the same time-tested and professional DevOps teams that operate infrastructure for Chainlink Price Feeds, which successfully secure tens of billions of dollars in value acros DeFi today. Chainlink Keepers are also optimized for low-costs and generate call data to provide cost-efficiency and trust-minimization.
88mph offers two products:
- A fixed terms, fixed-rate product that allows users to earn a fixed interest rate on the assets they supply at a custom or preset maturity.
- A levered interest rate instrument, called Yield Tokens (YTs), that allow users to speculate on the rise in APY of the underlying lending protocols used by 88mph or hedge their borrowing costs.
By using those products, users can claim MPH tokens, which can be staked to earn 88mph protocol revenue and voting rights.
Here’s how each product works.
Fixed terms fixed-rate product: 88mph pools users’ deposits and lends them at a variable APY on lending protocols like Aave and Compound. 88mph shares in the variable interest that borrowers pay back to the pooled funds. 88mph determines its fixed-interest rate according to the deposit’s duration, by offering between 25% and 75% of a 30-day exponential moving average (EMA) pulled from the variable APY of the underlying lending protocols.
The 88mph’s model offers a more generous fixed interest rate for deposits with a short duration, and a more conservative rate for the long duration.
Yield tokens: or YTs are fungible ERC-20/ERC-1155 tokens that allow users to profit from the rise in the underlying lending protocols’ APY used by 88mph or hedge part of their borrowing costs of a loan (e.g. a Dai borrower on Compound would purchase cDAI YTs on 88mph).
YTs can be purchased by users when a deposit is made in an 88mph fixed-rate yield pool, and each YT is tied to a deposit. YTs give holders the right to earn all the future variable-rate yields generated by the corresponding deposit + the purchase cost of the YTs.
YTs are more than an instrument for speculating on yields. When someone buys YTs, the insolvency risk of the fixed-rate yield pool is decreased, via decreasing the amount of promised fixed-rate yield that is not backed by real assets.
Automatizing On-Chain Interest Rate Updates With Chainlink Keepers
In order to make our platform as user friendly and seamless to navigate as possible, we have been actively searching for ways to automate updates of our on-chain interest rates. Since smart contracts don’t auto-execute, they require externally owned accounts to trigger their execution by calling on-chain functions. Keeper are external bots that call on-chain contract functions when predetermined conditions are met.
In the case of 88mph, we have developed a Keeper Hub contract that allows an external account to easily check which of our many on-chain interest rates requires an update by calling checkUpkeep(), and then call performUpkeep() with the return value from checkUpkeep() so that only the interest rates that need to be updated are updated, optimizing gas costs.
After examining the keeper landscape, we decided to automate our smart contracts using Chainlink Keepers because they provide several optimizations over other solutions:
- High Uptime — Chainlink Keepers are run by the same professional DevOps teams that have an established on-chain performance history of providing high reliability to Chainlink Price Feeds during extreme network congestion.
- Low Costs — Chainlink Keepers incorporate several gas-optimizing features that lower and stabilize the costs of automating maintenance tasks for users, most notably a rotating node selection process to prevent gas price auction wars.
- Decentralized Execution — Chainlink leverages a decentralized and transparent pool of Keepers to provide strong guarantees around secure contract automation, saving teams time and mitigating the risks around manual interventions or centralized servers.
- Expandable Computation — Chainlink Keepers perform off-chain computations and generate calldata for smart contracts, allowing low-cost development of advanced, trust-minimized dApps.
“Given the historical reliability of Chainlink infrastructure throughout extreme periods of network congestion and market volatility, Chainlink Keepers was a clear choice when deciding on an automation solution for updating our on-chain interest rates,” stated McFly, Co-founder of 88mph. “Having a low-cost, decentralized automation solution like Chainlink Keepers enables us to create a low-friction, easily managed user experience for interacting with novel cryptocurrency-based bonds.”
Chainlink is the industry standard oracle network for powering hybrid smart contracts. Chainlink Decentralized Oracle Networks provide developers with the largest collection of high-quality data sources and secure off-chain computations to expand the capabilities of smart contracts on any blockchain. Managed by a global, decentralized community, Chainlink currently secures billions of dollars in value for smart contracts across decentralized finance (DeFi), insurance, gaming, and other major industries.
Chainlink is trusted by hundreds of organizations, from global enterprises to projects at the forefront of the blockchain economy, to deliver definitive truth via secure, reliable oracle networks. To learn more about Chainlink, visit chain.link and subscribe to the Chainlink newsletter. To understand the full vision of the Chainlink Network, read the Chainlink 2.0 whitepaper. Want to discuss an integration? Talk to an expert.
88mph offers a series of fixed-rate APY pools for various assets, such as DAI, USDC, WBTC, and ETH. When users/protocols deposit assets into an 88mph pool, they earn fixed-rate yield that is redeemable at maturity, as well as MPH tokens as a deposit incentive.
For example, a 12-month deposit of 100 DAI will deliver a fixed yield after 12-month. If the fixed yield rate at the time of deposit was 10%, then the 88mph protocol delivers 10 DAI of yield to the depositor when the deposit reaches its maturity one year later.
Under the hood, 88mph pools lend deposited funds to variable-rate yield protocols such as Aave or Compound. To learn more about how 88mph converts a stream of variable-rate yield into fixed-rate yield, check out our documentation.