As many of you know (but stating for posterity) a research initiative was run recently (late 2023) to collect research ideas for Rocket Pool protocol improvements. I volunteered and was chosen as one of the individuals to review these research entries alongside other much more qualified and busy people.
I wanted to structure and sort the various ideas suggested across the entries before giving them review scores. Given that this sort of output should be generally useful, I’m posting it here. Some points and caveats:
- This is purely a summary / information structuring effort. I’ve attempted to keep it judgement free.
- The sections are loosely based on the research areas listed in the research initiative bounty. I’ve not followed them exactly because many entries targeted multiple areas, and some targeted areas were not explicitly requested in the bounty.
- This is some mid-ground between a breakdown of ideas and a breakdown of the entries. A pure breakdown of ideas seems more useful in the long run, but also more work.
- The order of sections, and of ideas / entries within sections is largely arbitrary. An idea at the end of this document is not worse or better than one at the beginning.
- The bullets cannot fully reflect the complexity of some of these research entries. I would encourage anyone that finds a section interesting to read the proposals in detail.
- Terminology is all over the place.
- Feels like there could be value to something like this being maintained in the longer term and used as a shared point of reference for the core devs and all the community researchers. I can’t commit to this right now, but if anyone is interested I’m happy to support.
With that out of the way, I hope this is useful to some people.
Section 1: Zero RPL Bond Minipools and Friends
Idea A: Reward Redirection to Staking RPL Holders
Target(s): Mitigate NO RPL Requirement, RPL Value Capture
Address the problems of RPL value capture and NO RPL requirement by removing the requirement for NO’s to provide their own RPL. Additionally, RPL Holders may stake and pool their RPL. Owners of this staked RPL receive a share of rewards.
Variant A1 - Built-In RPL pool - NeverAnIsland
- RPL is staked by RPL holders and pooled.
- RPL is rented by NOs from RPL stakers and is still assigned to a node.
- RPL inflation rewards are provided to RPL stakers, ETH commission remains with NOs.
Variant A2 - No RPL megapools - Occam
- RPL is no longer linked to nodes.
- ETH-commission rewards are shared between RPL stakers and NOs.
- RPL inflation rewards are no longer provided to NOs, and RPL stakers don’t receive them either.
Idea B: Reward Redirection to NOs with RPL Bonds
Target(s): Mitigate NO RPL Requirement, RPL Value Capture
Solve the problem of NO RPL Requirement by allowing nodes without an RPL bond. Some portion of the value, commission or fees from the zero RPL bonded minipools flows to minipools that do have an RPL bond.
Variant B1 - Rent or Stake - Valdorff
- When depositing, renting nodes pay a fee in ETH based on the amount of ETH borrowed from the protocol. This covers them for 2 years of operation.
- RPL bonded nodes split the rental fees from the renter nodes in addition to RPL inflation rewards.
- Renting nodes can re-up their rent if there is need for rETH supply that is not met by RPL bonded nodes.
Variant B2.1 - Diverted Rewards - Samus
- A portion of Eth-Only minipool commission is split between RPL bonded nodes.
Variant B2.2 - No-commission minipools - Epineph
- Zero commission 8-ETH minipools without RPL collateral may exist.
- ETH commission is diverted to RPL bonded nodes.
Variant B2.3 - No RPL minipools - Luominx
- Some percentage of the ETH commission from Eth-Only minipools is diverted to RPL bonded minipools.
- Some percentage of the ETH commission from Eth-Only minipools may be diverted to increase rETH APR.
Variant B2.4 - Direct Capture 2 - Valdorff
- All NOs receive a share of the ETH commission generated by their minipools regardless of the amount of RPL staked.
- The rest of the ETH commission is pooled and split between NOs with RPL staked, based on how well collateralized with RPL their minipools are.
- The RPL inflation rewards are split between NOs with RPL staked, based on how well collateralized with RPL their minipools are.
Idea C: Value Redirection via External protocol
Target(s): Mitigate NO RPL Requirement, RPL Value Capture
Allow the problem of NO RPL requirements to be solved outside the protocol. RPL can be borrowed from the MYSO protocol. NO’s pay lenders at time of borrow and cannot be liquidated.
Variant C1 - MYSO Loans - Valdorff
Idea D: Reward Redirection to Protocol
Target(s): Mitigate NO RPL Requirement, RPL Value Capture
Completely do away with any requirement to bond RPL to create minipools. Instead, add a platform fee (may be adjusted by RPL vote) that diverts a portion of the ETH commission to the protocol treasury. Emission of RPL to node operators may or may not continue. Accumulated fees may or may not be used to buy and burn RPL.
Variant D1 - Collateral Requirements Removal - Zesty
Section 2: Lower Bond Requirements for Minipools
Idea E: Top Heavy ETH Bonded Minipools
Target(s): Lower Minipool Bond Requirements
Allow lower ETH bonds on minipools in a top-heavy fashion, where some initial set of minipools created by a node must have a larger-than-the-minimum ETH bond.
Variant E1 - Bond Curves - Valdorff
- To ensure enough collateral exists to cover MEV theft, slashing, and abandonment force an initial set of minipools to have higher ETH bonds.
Variant E2 - Medipools - Epineph
- Lowest ETH Bond minipool that can be created is LEB4, but this can then be bond-reduced down to linked LEB2/LEB1’s.
- Could also be done for LEB8’s.
Idea F: RPL Bond Sliding Scale
Target(s): Mitigate NO RPL Requirement, Lower Minipool Bond Requirements
Reduce the required RPL collateral and commission for lower ETH bonded minipools based on the amount of bonded ETH provided.
Variant F1 - RPL bond sliding scale - Epineph
Section 3: MEV Safety / Penalties
Idea G: Presigned Exit Messages
Target(s): Lower Minipool Bond Requirements, MEV Safety
Have the oDAO collect pre-signed exit messages from lower ETH bonded minipools that can be used to force-exit them to prevent persistent misbehavior.
Variant G1 - Pre-signed exit messages/reusable minipool contract - Epineph
Idea H: Unsmoothing Fee
Target(s): Lower Minipool Bond Requirements, MEV Safety
Protects rETH holders from theft of MEV in lower ETH bonded minipools by requiring nodes to start with a negative smoothing pool balance. Part of an individual block’s MEV is returned to the NO rather than entering the smoothing pool if it exceeds a certain threshold.
Variant H1 - Unsmoothing Fee/lottery fee - Epineph
Idea I: Single Strike, Pro Exit MEV Penalties
Target(s): MEV Safety
Harsher immediate punishment for MEV theft that falls short of total seizure.
Variant I1 - Penalties revamp - Epineph
- Maximum penalty leaves 10% of RPL and ETH stake intact.
- ETH Commission is reduced to 1%
- RPL rewards and voting power are immediately revoked.
Section 4: Great Ideas that are hard to Categorise
Idea J: Vary all minipool commission based on the demand for new minipools
Target(s): Manage rETH / NO Balance
Address the difference in supply and demand in rETH by dynamically changing the minipool commission. More minipools than needed means lower commission per minipool. Less minipools than needed means higher commission per minipool.
Variant J1 - Universal Variable Commission - Epineph
- Opt-in delegate for minipools, likely combined with megapools as they already require migration.
- Imbalance can be inferred from the amount of ETH in the deposit pool, or by how full the minipool queue is.
Idea K: Priority Deposit Pool
Target(s): RPL Value Capture
Increase utility of RPL by creating a priority deposit pool for bundled rETH and RPL purchases. When rETH’s market price deviates from its oracle price, allow purchases of rETH directly from the protocol at oracle price if accompanied by a buy-and-timelock of RPL.
Variant K1 - Priority deposit pool (late entry) - DagoDuck
Idea L: Prefer High-bond Minipools
Target(s): Strengthen rETH
Summary - Increase rETH APR by preferring high ETH bond minipools over low ETH bond minipools when minipool supply is not the limiting factor on protocol growth.
Variant L1.1 - Preferential queue for higher ETH bonded minipools - Epineph
- Implement a preferential queue that only allows new low ETH bond minipools when there is no demand for new high ETH bond minipools.
Variant L1.2 - Preferential queue for higher ETH bonded minipools - Epineph
- Implement permissioned entry that only allows new low ETH bond minipools when there is no demand for new high ETH bond minipools.
Idea M: NO Tax Favorability
Target(s): Improve NO Profitability in Common Tax Regimes
Shift value accrual mechanisms for NOs such that they are taxed less under common tax regimes.
Variant M1 - Value Accruing Options - Sckuzzle
- Implementing value-accruing tokens for NOs to shift value-gain to be handled as capital gains tax rather than income tax under common tax regimes.
Idea N: NO Underperformance Disincentives
Targets: Strengthen rETH, Improve NO Profitability
Disincentivize bad NO performance by redirecting their rewards to the parties that are negatively impacted by their bad performance.
Variant N1 - rETH Protection - ArtDemocrat
- Use RPL rewards from bad NOs to purchase ETH at auction.
- Purchased ETH is split between rETH holders and members of the smoothing pool.
- Some portion of the RPL redirected from bad NOs can be burned to reduce RPL supply.
Idea O: Reduce Minimum RPL Bond as rETH Supply Decreases
Target(s): Mitigate NO RPL Requirement
Reduce the minimum RPL bond for minipools as the rETH supply decreases from its highest ever value.
Variant O1 - Jaws of life- dynamically valuing RPL - Epineph
- Every full 10% drop of rETH supply from high water mark reduces the minimum RPL bond required to create a minipool by 10%. Increases in the rETH supply reverse the effect.
- The Minimum RPL bond required to receive inflation rewards remains unchanged.