Pooled liquidation and arbitrage protocol KeeperDAO has launched, the team announced on July 18. 

KeeperDAO is an on-chain liquidity underwriter, “acting as a proxy volatility fund” that provides a liquidity backstop for lending and synthetic asset protocols. In simpler terms, it is a mining pool that offers an efficient mechanism for large scale arbitrage and liquidation trades on DeFi protocols. 

The protocol has several touted applications through its capturing on-chain opportunities on Ethereum (ETH). The official statement on this reads,

This could be liquidating a position in Compound or dYdX, taking over a Maker CDP, rebalancing a SET basket, or taking advantage of arbitrage between Kyber and Uniswap. By joining KeeperDAO, both Keepers and LPs benefit from economies of scale. LPs benefit from shared capital and profit, and Keepers benefit from incentivized collaboration (and hence reduced competition).

Those who manage the liquidation, arbitrage and rebalancing are Keepers. Keepers and liquidity providers are rewarded for the network contribution through a communal pool of compatible assets. 

With the protocol, KeeperDAO expects to lower the opportunity cost of capital, the barrier of entry and gas costs. By acting as an insurance fund for DeFi, they hope to secure the market while allowing more casual investors partake in DeFi opportunities.