Not financial advice. All 3 options are fine, will not hinder long-term investment thesis. Albeit difficult, let’s assume RPL staked greater than min to a certain extent would provide additional value to RPL. Chalk it up to NOs servicing 3x the amount of rEth with 8LEB and in return we create a runway for their future rEth consumption. Artificial demand and RPL TVL increases from Existing NO’s pressured to increase their RPL staked alongside rEth consumption to achieve similar RPL APY as status quo – scaling. Real question - what is the ideal max that would not cannibalize rEth consumption or restrict NO demand. Assume all 16 minipools will convert to LEB8.
Currently, we consume ~147k rEth with ~9.2k minipools. With LEB8, immediate increase to 442k rEth. We will need 294k rEth to meet current NO demand, or 3x current which took us 1 year of extraordinary increases from a long-awaited launch. Based on current collateral % per NO, additional ~1k eth of rpl purchased to meet minimums of 8LEB. Our ratio, all else held constant, ~13% increase - not much.
At this point, existing NOs will be waiting to receive a piece of 294k rEth from DP not yet available. If we infer from our first year, it will take 3 years to clear existing NO demand, not including any new NOs. Current NOs may reach for 150% collateral while waiting but at 12 they are receiving the same yield as before. No immediate pressure - Lost opportunity for demand.
New NOs - Splash onto the scene like Mike Tyson hungry for dem ears. DP empty. Assume first year minipool growth, new NOs bring additional 18.4k LEB8 minipools requiring 294k rEth to meet their demand, or 3 years. Let’s cut new NO demand in half, assuming disappointment from RPL rewards at 24 max. Minimum 1.5 years to clear first year new NO demand. Time to satisfy existing NO + new NO appetite = 4.5 years to clear NO demand. You can extrapolate conservatively from here.
New NOs also bring 44.1k eth of RPL to meet minimum. Around 1 year mark (likely longer since they won’t be able to create minipools from lack of rEth), total of 45.1k eth might be purchased. Our ratio, all else held constant, significantly higher.
This is a short-term picture. I believe RPL will have 3 business cycles in chronologic order (with short bursts where the pendulum swings); rEth shortage, NO shortage (unless LEB4 launch extending rEth shortage), and inevitably, NO shortage.
LEB8 stats - Assume all minipools maintain current 40% avg RPL staked; Est. ~22m RPL tokens after 3yrs inflated:
Avg 40% applied to 24eth = 9.6eth of rpl avg
- Max possible minipools = 45k
- Max rEth consumption 1.1m - Highly unlikely we 7.5x rEth within 2 years.
- Max total tvl = 1.9m eth
Avg 40% applied to 12eth = 4.8eth of rpl avg
- Max possible minipools = 91k
- Max rEth consumption = 2.1m eth
- Max total tvl = 3.3m eth
2.4 avg:
- Max possible minipools = 181k
- Max rEth consumption = 4.3M rEth
- Max total eth TVL = 6.4m eth
There is an inverse relationship to our TVL based on average RPL staked. While its clear 2.4 max seems to be the clear winner, I would infer its better suited for when our rEth consumption reaches near our max capacities. It would make 2.4 max better suited for our 3rd business cycle – NO Shortage. If RPL is successful, it is likely we would have to lower min to achieve greater rEth consumption/TVL. RPL token inevitably becomes increasingly scarce/expensive. Ancillary assumption w/ tech held constant - NOs = higher barriers to entry than stakers.
Simply don’t see NO shortages/rEth cannibalized post-LEB8 + ~3 years. In the meantime, a well calibrated min/max could maximize our efficiency and value. Regardless, RPL has a bright future. All 3 options do not harm RPL long term, but each can avoid creating time gaps where demand/TVL lags due to constraints. If you agree we will be rEth limited, supplementing RPL TVL via 24 or 36 max while our new NOs await their rEth seems to be ideal. We can adjust once NOs become a clear limit to our growth. Thanks for reading. @waqwaqattack @Valdorff @ken @Wander
