Thank you for your comments @Valdorff. We greatly appreciate your input and the effort you put into improving our proposal. As we highlighted in our proposal, our primary goal is to encourage dialogue and brainstorm ideas within the community.
I agree that we should consider the marginal return on investment (ROI) of RPL compared to a mini pool where only the minimum amount of RPL is used as collateral. As you explained, this would involve considering a combination of RPL ROI and ETH ROI, as outlined in our analysis. This is indeed more realistic than solely comparing to ETH ROI.
In practical terms, incorporating this consideration into our analysis and simulations wouldn’t significantly change the framework we presented. This is the advantage of the proposed tool—it can easily accommodate feedback from the community.
To create a pool, a node operator only needs to provide a minimum of 10% RPL as collateral. The decision for the operator lies in either:
- Adding more RPL collateral: The marginal investment would be based on the RPL ROI, considering the expected risk we discussed. As we outlined in our analysis, this additional investment is discretionary and depends on how attractive the RPL ROI is. At the protocol launch, the ROI was very appealing, resulting in many node operators holding levels higher than the minimum requirement.
- As you mentioned, using the capital to create a new pool with a marginal return that combines both RPL and ETH returns.
Ultimately, the decision will depend on comparing the expected risk-adjusted returns of these alternatives. The same applies to the decision of node operators to recollateralize in order to meet the minimum collateral level.
Our multi-agent simulations aim to model:
- The amount of collateral posted when a new mini pool is created.
- The recollateralization process.
- An extreme scenario where node operators have to exit due to mark-to-market losses incurred on their RPL.
We believe the proposed framework provides a good starting point for benchmarking various tokenomics proposals from the community. The simulations can also integrate the speculative aspect you mentioned, where NOs will hold higher levels of RPL when they expect the price to go up. That is definitely not a bad thing to complement the realistic aspect of our simulations.
We fully acknowledge that, like any model, there is room for improvement. We are open to integrating additional factors based on contributions like yours and those of other members of the Rocket Pool community.