It is clear from the first few months that minipools will be the limiting factor to Rocket Pool’s growth. While we definitely should do all we can to attract more node operators we can also make better use of the ones we already have. The RPL stake is meant as collateral against the node and also used as an added reward for node operators. The extra 50% does nothing to provide extra insurance and is excessive in rewarding large nodes when the network would be better off if they were running more minipools. The smart contracts only require 16 ETH to be returned to the rETH pool so any insurance over 100% won’t ever be used. The over collateralized nodes also reduce rewards for smaller nodes.
I took a quick look at just the top 5 stakes and rebalancing them to 100% would provide an additional 93 minipools.
This is an easy change to make (just a single variable change I think) and wouldn’t require any smart contract changes. It would also better align the incentives with the goals of more minipools and being more attractive to small stakers.
A few reasons against. I’d be opposed to reducing the max collateral.
- Since RPL has the higher yield, this would reduce our maximum APR from 12.8% (for C=150%) to 11.6% (C=100%). This could meaningfully affect our ability to attract new NOs since the max yield would drop by roughly ~10%. With our growth being heavily bottlenecked by NOs I don’t think now is the right time to tighten limits on NOs.
- DVT may be able to make productive use of this higher collateral by allowing highly collateralized nodes to take on unbonded minipools.
- We don’t yet know how much collateral will be needed for protection against MEV and tip theft. It could be that the extra insurance is beneficial to the protocol. This won’t be fully known until post-merge.
- I don’t think this would have the desired effect of pushing NOs to create more minipools by using their >100% surplus, based on conversations I’ve had with other NOs that are around the 150% mark.
I agree with marceau, I’m not sure reducing max collateral would actually result in more minipools, and if DVT gets implemented, it would actually result in less minipools.
The one other factor is that selling 93*16 = 1,488 ETH of RPL will put a significant downward price value on the RPL. Already it has slipped out of the larger liquidity range in Uniswap. Not arguing for or against this proposal just stating that this may have secondary consequences to be considered.
RPL over collateral should be alowed to run/start a minipool without 16ETH node deposit.
I bealive that RPL will outperform ETH in long term. Accepting RPL as 50% (Eth equivalent) as NO deposit to start a minipool, will increase:
1- demands for RPL ;
2- incentives to start minipools
So , removing 150% limit RPL collateral and accepint it to start a minipool is a gain gain strategie
Lack of minipool to attend rETH demand
- RPL stake are growing at a rate of 20% month/month and Node Op at less than 10% rate m/m
- ETH/rETH Deposit pool is contantly at 80-100 % of it’s maximum capacity 2000ETH
- avarege RPL staked collateral is 55 eth per node !!
More Minipool creaction
The proposal = open the gate to NO to start 900 minipools
Allow node operators to use part of those 55ETH staked as RPL to start a minipool
32% of 55ETH = 17,60 ETH = minimum treshold to start a minipool
If we allow node op to use 1/3 of those RPL to start a minipool , we have the potencial to start 1 minipool per node = 907 minipools
I think what Marceau is alluding to is that high RPL collateralised nodes would not sell their RPL to create minipools, but would either hold it or do LPing with it.
The high RPL ratios are partially a result of people believing in the protocol. Personally I wouldn’t sell RPL to create more minipools.
Scaling should be done through LEBs, not collateral ratio tweaking.