DeFi 1.0 protocols developed on Ethereum were designed to be supplemented by pseudo-anonymous agents (known as NetworkKeepers). Such agents perform event-triggered actions such as liquidating under-collateralized positions in MakerDAO/Compound/AAVE or re-aligning ever-changing prices across AMM pools via arbitrage. Autonomous agents acting as Keepers were a way to make DeFi 1.0 primitives robust and decentralized. Permissionless actions of such Keepers are generally triggered by economic incentives (significant price differences, liquidation premiums, etc). Therefore, keeper-type agents typically extract a disproportionate value from the protocols and their users.
The evolution of DeFi 2.0 and beyond requires more autonomous automation to perform routine on-chain tasks, but not necessarily motivated by large incentives. We expect that going forward DeFi will demand broader, and less costly automation solutions, dramatically expanding the role of keeper-type agents towards becoming more generalized "Automation Agent Networks".
PowerPool believes that automation networks will be crucial for enabling the next generation of automated, multi-chain/layer, intelligent yield optimizing DeFi protocols.
What transactions need to be automated?
There are primarily two types of transactions that can be classified by the nature of economic incentives needed to keep the protocol functioning:
Type 1: self-incentivized transactions such as collateral liquidations containing direct monetary incentives for the executor. This means that a transaction is attractive for permissionless execution since it results in certain profits;
Type 2: transactions that are not incentivized by design such as calculating TWAP prices or updating protocol parameters. This means the economic and technical nature of the transaction doesn’t offer any profit for the executor. However, we should note that it is technically possible to add some kind of profit for the execution of any transaction.