CoinClear

Gelato Network

5.6/10

The invisible middleware powering DeFi automation — essential infrastructure with growing adoption but unclear token value capture.

Updated: February 16, 2026AI Model: claude-4-opusVersion 1

Overview

Gelato Network is a decentralized automation protocol that enables smart contracts to be executed automatically based on predefined conditions — time-based triggers, price thresholds, on-chain events, or arbitrary logic. Founded in 2019 by Hilmar Orth and Luis Schliesske, Gelato operates as middleware that bridges the gap between smart contracts (which can't execute themselves) and the real-world triggers that should initiate their execution.

In traditional web2 systems, scheduled tasks and event-driven automation are trivial (cron jobs, webhooks). In web3, smart contracts are passive — they only execute when called by an external transaction. Gelato solves this by providing a network of executors (called "Gelato Bots") that monitor conditions and submit transactions when criteria are met. This enables use cases like automated DeFi yield harvesting, limit orders, recurring payments, and liquidation bots.

Gelato has evolved beyond basic automation to offer a broader web3 middleware stack: Gelato Relay (gasless transactions and meta-transactions), Gelato Functions (serverless web3 functions), and Gelato VRF (verifiable random function). The protocol supports 30+ blockchains including Ethereum, Arbitrum, Optimism, Polygon, Base, BNB Chain, and others.

Major DeFi protocols using Gelato's automation include MakerDAO, Aave, Instadapp, Connext, and PancakeSwap. Gelato processes millions of automated transactions, but its role is largely invisible to end users — it's the infrastructure behind the automation rather than a user-facing product.

Technology

Automation Architecture

Gelato's core automation system works through a task creation and execution model. Developers create "tasks" that specify: a trigger condition (when to execute), a target function (what to execute), and any necessary parameters. Gelato Bots continuously monitor the blockchain for trigger conditions and submit execution transactions when conditions are met.

The system supports multiple trigger types: time-based (execute every X seconds), on-chain conditions (execute when price crosses a threshold), and off-chain triggers (execute based on API responses). Tasks can be chained, creating complex multi-step automation workflows.

Gelato Relay

Gelato Relay enables gasless and sponsored transactions, allowing dApps to abstract away gas fees for their users. This is critical for user experience — new users shouldn't need to hold ETH to interact with dApps. Relay uses meta-transactions where users sign messages and Gelato submits the actual blockchain transactions, with gas costs covered by the dApp or protocol.

Gelato Functions

Gelato Functions extends the platform into serverless web3 compute, allowing developers to write TypeScript functions that execute off-chain logic and submit on-chain transactions. This bridges off-chain computation with on-chain execution, enabling use cases like automated portfolio rebalancing based on off-chain data.

Multi-Chain Support

Gelato operates across 30+ blockchains with consistent interfaces, allowing developers to deploy automation once and run it across multiple chains. This multi-chain coverage is essential as DeFi fragments across L1s and L2s.

Security

Executor Trust Model

Gelato Bots are operated by a mix of Gelato-operated and third-party executors. The trust model assumes executors are honest — they submit transactions as specified by task creators. Executors cannot modify the execution logic (which is on-chain), but they can fail to execute (liveness failure) or front-run transactions. Gelato mitigates front-running through executor selection mechanisms and rotation.

Smart Contract Risk

Gelato's automation contracts have been audited by G0 Group, Certora, and others. The contracts are relatively simple — they primarily handle task creation, executor selection, and payment routing. The attack surface is smaller than complex DeFi protocols, but vulnerabilities could affect all protocols relying on Gelato for automation.

Dependency Risk

Protocols relying on Gelato for critical automation (like liquidations or yield harvesting) introduce a dependency on Gelato's infrastructure. If Gelato's executor network experiences downtime, dependent protocols' automated functions would fail. This is a liveness risk rather than a safety risk — funds aren't directly at risk, but automated strategies would stop executing.

Operational Track Record

Gelato has processed millions of automated transactions since 2019 without a major security incident. The operational track record is solid, though the consequences of failure are generally less severe than oracle failures or bridge exploits.

Decentralization

Executor Network

Gelato's executor network includes Gelato-operated bots and third-party executors. The network is not fully permissionless — executor participation has been gradually opening but remains partially curated. This hybrid model prioritizes reliability over full decentralization, which is appropriate for infrastructure that must be highly reliable.

Governance

The GEL token provides governance capabilities, but in practice, significant operational and development decisions are made by the Gelato team. The protocol is in the early stages of progressive decentralization, with the team retaining meaningful control over protocol direction and executor management.

Centralization Trade-offs

Gelato's centralization is a practical choice: automation infrastructure requires high reliability and fast response times, which are easier to guarantee with curated executors. However, this means users trust Gelato's operator set for critical automation, which is a centralization risk for protocols that rely on it for time-sensitive operations.

Adoption

Protocol Integrations

Gelato is integrated into numerous DeFi protocols for various automation needs: MakerDAO (debt ceiling management), Aave (automated operations), Instadapp (DeFi Smart Accounts), Connext (cross-chain automation), PancakeSwap (limit orders), and many others. These integrations demonstrate Gelato's utility as infrastructure middleware.

Transaction Volume

The network processes millions of automated transactions across supported chains. Transaction volume has grown steadily as more protocols adopt automation. The growth trajectory is healthy, driven by genuine demand for automated smart contract execution.

Developer Experience

Gelato's developer experience is widely regarded as strong, with comprehensive documentation, SDKs, and integration guides. The Gelato Functions product, in particular, has lowered the barrier for developers to build automated web3 applications. The developer community is engaged and growing.

Invisible Infrastructure

Gelato's adoption challenge is visibility: most end users never know they're benefiting from Gelato's automation. This makes it difficult to build a consumer brand and directly monetize at the user level. Gelato's value accrues at the protocol integration level, which is sustainable but limits growth avenues.

Tokenomics

Token Overview

GEL is the native governance and payment token of the Gelato Network. The token is used for staking by executors, governance voting, and payment for automation services. Total supply is 420.69 million tokens (a nod to internet culture), with distribution across team, investors, ecosystem development, and community.

Value Capture Challenge

GEL's value capture is the protocol's primary economic challenge. Many automation services are paid in native gas tokens rather than GEL, limiting direct demand for the token. The staking requirement for executors provides some demand floor, but staking yields must be competitive to attract operators. Fee revenue flows partially through GEL but the mechanism for value accrual is still evolving.

Competitive Fee Pressure

Automation services face price competition from Chainlink Automation (formerly Keepers), OpenZeppelin Defender, and custom bot solutions. This competitive pressure limits Gelato's ability to charge premium fees, constraining GEL's revenue-driven value capture.

Risk Factors

  • Token value capture: GEL token's connection to protocol revenue is unclear; many services are paid in native tokens rather than GEL.
  • Competition: Chainlink Automation and other solutions compete directly with Gelato's core automation product.
  • Executor centralization: The executor network is not fully decentralized, creating a single-entity dependency for critical automation.
  • Invisible infrastructure: End users don't interact with Gelato directly, making it difficult to build brand value and direct monetization.
  • Dependency risk: Protocols relying on Gelato for critical operations introduce liveness risk if the network experiences downtime.
  • Market sizing: Smart contract automation may be a smaller addressable market than oracle services, data indexing, or other infrastructure categories.

Conclusion

Gelato Network fills a genuine infrastructure gap in web3: the need for reliable, automated smart contract execution. The protocol's technology is well-designed, its multi-chain coverage is comprehensive, and its integration into major DeFi protocols demonstrates real utility. The expansion into gasless transactions (Relay) and serverless functions broadens the value proposition beyond simple automation.

The core challenge is economic sustainability and token value capture. Gelato is essential middleware, but essential middleware has historically been difficult to monetize in both web2 and web3. The GEL token's value capture mechanism needs strengthening, and competition from Chainlink Automation creates pricing pressure.

The 5.6 score reflects Gelato's solid technology and growing adoption as infrastructure middleware, tempered by tokenomics challenges, centralization of the executor network, and the difficulty of monetizing invisible infrastructure. For protocols needing automation, Gelato is a proven and reliable choice. For GEL token holders, the path to value accrual remains uncertain.

Sources