KeeperDAO (ROOK), an on-chain liquidity underwriter for decentralized finance (DeFi), is ready to hit the milestone of $5 billion in flash loan volume since v2 was launched in November last year.

At the beginning of January, the flash loans volume was just under $120 million, and it was at the end of the same month that it first hit the $1 billion mark.

Source: Dune Analytics

In comparison, DeFi blue-chip lending project Aave has done $2 billion in flash loan volume in its entire lifetime. Aave was launched as ETHLend (LEND) with an ICO in 2017, raising $16.2 million.

KeeperDAO’s mainnet was launched in July 2020, the same month it raised a “seven-figure sum” from crypto venture capital firm Polychain Capital and fund manager Three Arrows Capital in a seed funding round.

With a market cap of $123 million, its token ROOK is currently trading at $367, down 56% from its all-time high of nearly $840 last month.

Today, the total value locked in the project has reached almost $230 million while having $42.5 million in its Treasury, as per Dune Analytics.

The size of the KeeperV2 pool is currently under $300 million after surpassing it earlier last month, with DAI accounting for the highest share (30.8%), followed by WETH, ETH, and USDC.

KeeperDAO is a DeFi protocol aiming to alleviate liquidity issues in the beginning sector by providing a ready-to-use liquidity pool for flash loan-like transactions. The project has cited the March 2020 cryptocurrency market crash as an example when having liquidity on-hand would have benefitted the ecosystem.

In an interview on Epicenter Podcast, KeeperDao co-founder Joey Zacherl explained about the project whose goal is to “capture profit opportunities on-chain and distribute them to the various participants.”

Interestingly, there's a lot of participants who actually don't see any of this profit even though they participate in making it possible by making a trade or limit order or using a DEX aggregator.

So, KeeperDAO captures profit and helps it redistribute and also coordinate all of the various participants.

About the hiding game, which was launched at the beginning of last month, Zacherl said it “is essentially our implementation to where we align incentives between users and keepers.”

The idea is to take actions that users like to perform that end up resulting in profit opportunities that get gas auctioned or sandwich traded and take some of those actions and put them in such a way that the user and the keeper can actually collude together and prevent that gas auction or sandwich trade from ever happening and in a way that user gets some of that profit when captured, he explained.

The next feature coming out for the hiding game is potentially a higher reward mechanism. Currently, taking the treasury and staking it back in the KeeperDAO lp pool is one option, but the next pool that's being launched may generate even a higher yield, Zacherl said.

The project basically has a goal to create this entity as a DAO on-chain and enable all the participants to govern the system. While the transition to DAO is not clearly defined because the team is still working through it, and it’s a short-term challenge.

“We're trying to kind of let the pieces fall where I think the DAO voting comes into high value,” Zacherl said. A transition into a mechanism that allows ROOK holders to make the decisions as opposed to the team doing it internally, he added.

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