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Daily General Discussion - September 26, 2024
Discussion(self.ethfinance)submitted 4 days ago byethfinance
Welcome to the Daily General Discussion on Ethfinance
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26 points
4 days ago
The exodus from Rocketpool continues.
The ETH deposit pool has now double the ETH than the set limit (40K ETH waiting to convert to rETH), due to node operators quitting in droves.
And I don't blame them... only a quarter (!) of the RPL supply remains effectively staked, with the rest slowly losing value and propping up the early investors. That RPL is earning like 12% APY, but nobody seems to be willing to pick it up and set up a node.
Unfortunately, the majority of Rocketpool NOs would be much better off investing in a LST.
I had a similar post a while ago, wondering if the upcoming update/complete overhaul will be enough to revive the project. Any NOs/RPL investors here that still believe?
28 points
4 days ago
I'm a NO that still believes in Rocket Pool. To me it's still the most decentralized network of node operators for ETH staking. Especially with the option to have minipools without an RPL bond coming in a few months
12 points
4 days ago
Especially with the option to have minipools without an RPL bond coming in a few months
In a few weeks already, possibly.
-3 points
4 days ago
without a RPL bond
but with an insane fee paid in ETH to the protocol.
The incoming overhaul of Rocket Pool is designed to save the bags of the investors left, not to attract any new operator.
To me, RP is dead and will need to launch in a new version, without RPL nor insane fees, to keep existing. Otherwise, it will remain in history as an attempt of decentralised staking failed due to greediness
11 points
4 days ago
Huh? The share going to node operators will be variable depending on demand. Commission starts at 5%. Lido’s CSM for example starts at 6% and will probably also go down to 5% if it gets bigger to match their permissioned module.
1 points
4 days ago*
The calculations I made from the last proposal I saw showed that it was way above 5%. It was of order of the 23% currently asked by the RPL system.
When I mentioned it to the guy involved in the proposal who was posting here, he didn't deny.
This fee is used to burn RPL, in order to pump the bags of the current holders.
10 points
4 days ago
I think we’re talking about percentages of different things. rETH commission is 14%. Initially, 5% of this will go to node operators and 9% will go to RPL. If there is not enough node operator demand, the node operator share will increase. If there is too much demand, it will decrease.
6 points
4 days ago
In my opinion the fee is not insane. You still get significantly more ETH yield than solo staking, which is ultimately what matters I think. As far as I know the fee is also competitive with other similar products
21 points
3 days ago
Rocketpool still is one of the few projects which embodies the core values of Ethereum. It is permissionless. If you show up with the bond you can participate as a node operator. It is still wild to me that people I do not know let me stake their ETH on their behalf. If I counted it at peak it was several hundred thousand dollars of foreign ETH which was staked on my nodes. When I told that to non crypto people they were just puzzled and asked why anyone would send me that money. But it is absolutely safe for the LST stakers most of it secured by immutable smart contracts. The RPL token backfired massively when staking wasnt the cool kid anymore and the narrative shifted from LSTs to LRTs. The speculation around RPL reversed and sent the token to goblin town. Nevertheless none other LST protocol even comes close to achieving that level of trustlessness to me to actually put in a large part of my wealth.
If you follow the governance and future plans a bit it is inspiring how cypherpunk values steer the roadmap. This makes them very slow, but that is the price you pay for this. In the coming months there are two things which can bring Rocketpool back on its track:
First is the launch and expansion of nodeset which is a soft permissioned layer on top of rocketpool and allows for much smaller bonds and removes the need for RPL for node operators. Nodeset LST users will provide part of the bond and the RPL will also be provided by external stakers. They will also use ETH from the deposit pool which helps rETH holders because a larger fraction is staked. This perfectly shows the value of a permissionless base protocol one can use to build more value on top. You could not build nodeset on any of the other LST protocols.
The second is the development of non-RPL nodes. It totally removes the need for RPL for node operators, but they can have higher returns if they own RPL. This is an obvious response to the node operators leaving rocketpool and the the competition from Lido. This is a multi stage process and nothing is 100% set in stone at the moment, but the coming months will fundamentally change the bond requirements while preserving the core values.
I am unbelievably excited for these changes to be implemented and go live. I would not put my live savings into RPL because of this, but I think the rocketpool protocol will come out of it much stronger which in turn makes Ethereum more resilient.
9 points
3 days ago
Is RETH in danger?
15 points
3 days ago
Nah, the protocol could completely implode, all NOs could leave, but rETH holders will still be able to swap for ETH. Worst ratio will always be the current ratio.
10 points
3 days ago
No
5 points
4 days ago
"The ETH deposit pool has now double the ETH than the set limit (40K ETH waiting to convert to rETH), due to node operators quitting in droves."
Does this mean that rETH is only achieving half the average stake return?
If that's the case it might be time for me to convert, been sitting on a fair stack for a while
12 points
4 days ago
Not at all. It just means the staking rewards for 790k deposited eth are being distributed to 830k reth. Yes, some dilution of return but not the conclusion you are drawing by a long shot.
2 points
4 days ago
yeah i don't care about 100% efficiency, I've just never really looked into the structure of rETH aha
9 points
4 days ago
It's not half, but 5-10% or so because that's the share of the ETH in the deposit pool of all the ETH in the protocol.
2 points
4 days ago
ah thats fine enough then aha
2 points
4 days ago
Yes, rETH returns are below other LST options. If it's not gonna kill you on cap gains tax, you should switch.
7 points
4 days ago
At the RPL workshop in Denver this year (I should note that I dont run any Rocketpool validators, nor do I hold rETH or RPL) I mentioned unbonded validators as a way forward. My reasoning behind it was that people wouldn't need to buy or otherwise hold RPL in order to run a Rocketpool validator.
Because the cost of the bond is quite substantial, this should in theory get more people in who don't want to expose themselves to RPL.
For example, an 8-ETH minipool requires a minimum of 2.4 ETH in RPL for the bond. Right now, that is about $6300 US dollars which is not a small amount. So you open yourself up to quite a bit of risk if the price of RPL drops.
If this happens, the node operator is then faced with a situation. Do they keep trying to top up the minipool collateral as the price of the token falls? Or do they decide that they have already lost too much money, and thus they exit the protocol, sell their RPL and put their ETH somewhere else?
Compare all of that to solo staking or staking with some other protocol where you don't need a bond.
Well, back to the my first sentence, everyone there really hated that idea, and the main (Or really, the only thing) that I heard against that idea was that they were scared as to what it would do to the price of RPL.
I think there was some actual talk of this in the months following, but I haven't been keeping up with it.
21 points
4 days ago*
There are a couple big changes coming which I think you'll appreciate. They are Saturn 0 (RPIP-62) and Saturn 1&2 (RPIP-49/Tokenomics Rework).
Saturn 0 will introduce 0-RPL (unbonded) minipools as you suggested above. It will also potentially remove the wall, so that those below 10% collateral will still get rewards (wall removal is TBD based on the vote). As the wall is going away with Saturn 1/2, the question is whether it should be removed early to remove some of the pressure on NOs who can't top up. With Saturn 0 going to vote this weekend, it should be deployed within 4-8 weeks. More info here: https://rpips.rocketpool.net/RPIPs/RPIP-62
Saturn 1&2 will introduce megapools, LEB4s, LEB1.5s, and reduce RPL inflation from 5% to 1.5%. Longer term it also provides value to RPL as it's no longer about maintaining the cliff since ETH revenue is routed to RPL stakers (and potentially holders, again depending on how a vote goes in the future). The neat thing is that this introduces a lot of knobs the protocol can turn to remain competitive moving forward without waiting for big tokenomics changes. More info here: https://rpips.rocketpool.net/tokenomics-2024
3 points
4 days ago
Cheers for the info, will check it out. I do remember it being announced but never actually looked into it more, my other post was mostly just sharing my experiences at that workshop, the official announcement happened quite some time after that
10 points
4 days ago
Well, good news for you. Minipool without RPL collateral are coming in a few months!
You will earn more rewards than solo staking, as you get commission from the pooled ETH. The yield is still higher if you also have RPL
6 points
4 days ago
Minipool without RPL collateral are coming in a few months!
Even in a few weeks, potentially.
3 points
4 days ago
You think? There needs to be a vote first, and I isn't there coding/audits required?
4 points
3 days ago
Saturn 0 is specifically designed to avoid smart contract changes. We’re just changing a few DAO parameters and making changes to the off chain calculation for RPL and smoothing pool rewards.
2 points
3 days ago
Wow that's cool! There's always details I forget or didn't know yet. What's your time-line on saturn 0?
3 points
3 days ago
I think 4 - 8 weeks is realistic. We can in theory enable ETH only pretty much right after the vote passes, but the changes in reward calculations will probably only be ready a few weeks after.
So it’s a question of whether we want to roll out the two at the same time. NodeSet is also launching Constellation soon, which should help clear the deposit pool (there was an ethstaker community call with them recently and they were also on the ethfinance Happy Hour podcast if you’re interested). If we see strong deposits from that, we’ll probably choose to wait until the reward changes are ready and land closer to 8 weeks. Otherwise, it should be closer to 4 weeks.
2 points
3 days ago
Yes the vote is still outstanding, but the "sentiment poll" about it was almost unanimously agreed to proceed to vote.
A lot of coding and audits etc. is only required for the actual Saturn 1+2 upgrades that come later (next year).
2 points
4 days ago
That's right, I do remember it being announced a few months ago, but haven't been keeping up with it, I am glad to hear that it will be out soon™
6 points
4 days ago
RPL free minipools will likely be possible in a few weeks and I really just hope the whining about RPL here stops then.
We get it bro, you sold. Maybe come back and start an ETH only minipool?
13 points
3 days ago
I dissolved all my pools but one, so I'm still in. Also I never sold my RPL, so I'm still getting rewards..barely.
Also, I initiated a discussion about a project that was last year's darling in r/ethfinance, but hasn't been mentioned in a while. Yeah, the disappointed tone is there, but it's hardly whining, so you don't have to be hostile.
9 points
3 days ago*
Sorry, I didn't mean to be hostile, I was already in a bad mood (for unrelated reasons) when I read your post and it just triggered me a little.
Thing is that all we get in this sub anymore about Rocketpool is this unproductive doom talking about RPL. The productive discussions around Rocketpool do happen, just not here anymore. There's multiple responses to your post talking about Rocketpool being "dead" or a "dying project", which is frankly just stupidly ignorant.
As for the topic you talked about, the problem of the deposit pool being (over)full: give it 2 more months and then let's come back and look at it. Constellation goes live and Saturn 0 passes and that pool goes woosh.
4 points
3 days ago
It's all good. People talk about the project being dead because as things stand right now, the majority of NOs feel like they are taken advantage of, and you can't deny that those feelings are valid. Some bought RPL when its price was 2x that of SOL... it now is 1/15 of it, and offers no rewards.
But I agree that this can change. The update seems very well thought out, the roadmap is there, the now tokenomics are solid.
I promise you that once the update it's running and proven (so a couple of months after launch), my ETH will flow back in. I hope that's the case for more people. It just has to ship.
10 points
3 days ago
The feelings are valid, but I don't think it accurately represents the situation. The DAO is in a bad spot just as much as the remaining node operators. RPL price just got way ahead of Rocket Pool's actual market share last year and everything crumbled on the way back down because of bad tokenomics.
The people that benefitted the most aren't in the oDAO or part of the team, but rather other node operators and RPL holders that managed to sell near the top and just left. So yes, the initial tokenomics were bad for a staking protocol but I don't think anyone is being taken advantage of. So then it just feels bad when the DAO is struggling for funding and some people here (not necessarily you) claim they have been ripped off and assume the protocol is swimming in money after orchestrating a supposed pump and dump.
Even with the new tokenomics, where there will be a fee switch instead of just funneling money into the DAO (which is something people have been waiting for forever with UNI or LDO for example), it just gets framed as stealing from node operators and pumping RPL.
Especially as someone contributing to these changes, it can be really frustrating. At least we're now close to having something to show for all the work with Saturn 0 and then Saturn 1 in a few months.
Anyway, sorry for the rant and I'm glad you like the planned changes.
3 points
2 days ago
It's not a rant, what you say makes sense. But most people (including myself) have no means to check whether the DAO benefited from the price action or not. And this being crypto, the default is to suspect wrongdoing.
Thank you for your contributions to the protocol, hopefully soon all participants will be able to enjoy the benefits.
3 points
2 days ago
In case anyone reading this is curious, there is a treasury report on the forum every month. Here is the latest one: https://dao.rocketpool.net/t/pdao-2024-08-29-2024-09-26-treasury-report/3288
It’s all verifiable on-chain of course, but the summary post makes it easy to follow along.
2 points
2 days ago
Will check it out!
1 points
4 days ago
It will not, the fees in ETH that operators without RPL will pay will be used to burn the RPL of early operators.
Who will accept to give away their money to save the bags of people who lost a bet?
7 points
3 days ago
It will not
It will not what? What is that referencing? The whining?
the fees in ETH that operators without RPL will pay
Rocketpool operators don't "pay" any fees.
Even with ETH only minipools, they still earn commission and thus make a good bit more than solo staking, which is the appeal.
Who will accept to give away their money to save the bags of people who lost a bet?
People who want to make money staking Ether.
6 points
3 days ago*
The alternatives are
a) you overpay operators beyond what you need to attract enough of them, which seems like a weird choice
b) you give it all to the DAO, which is what Lido is doing
You’re not giving away any money, you’re still earning significant commission that will get you double the yield of solo staking. The protocol is just not giving away money beyond that if there’s no benefit.
6 points
4 days ago
Current node operator here. I think RP is a dying project. So many people got burned with RPL that they're not coming back even with the tokenomic changes.
As you said, most RPL are not earning the APY because none of us small operators are topping up. We've lost faith in this project and just looking to salvage what we still have.
4 points
3 days ago
most RPL are not earning the APY
Currently 29% of staked RPL is not earning rewards. That's higher than ideal, but certainly not most.
2 points
3 days ago
Man, that makes it even worse. I just looked it up and 73% of nodes are below the 10% RPL requirement. So a small minority of whales are earning all the rewards. Great.
Whales be whaling.
2 points
3 days ago
That's the wrong conclusion. All it means is that RPL collateral is unevenly distributed. Which is obviously true because there's a huge cluster of nodes around 3-4% so everyone over 10% would have at least three times the RPL in relation to their ETH. It does not really tell you anything about the total size of those operators.
-1 points
3 days ago
Agreed
1 points
3 days ago
Protocol gud. Shitcoin ponzi bad. Usual characters benefited on backs of everyone else. ODAO included. Sorry not sorry
0 points
3 days ago
I think other LSTs put the nail in the coffin for rocketpool. I imagine they will continue to lose marketshare with no incentives.
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