- When referring to the RPL cliff, people usually mean the reward cliff. I.e. initial poll and the difference between variant A and B are about whether operators below 10% collateral will still receive RPL rewards every 28 days, not whether they need RPL when launching minipools. Both variants of RPIP-62 would remove the requirement.
- Some aspects of the protocol used RPL slashing as a penalty, but it was never truly required from a security perspective. The 8+ ETH bond is sufficient to cover any reasonable scenario that could result in losses for rETH holders or the protocol.
2 Likes
I would like to share my thoughts on how Iām going to vote. I am not yet decided, but I think sharing the decision process can be helpful for information processing across the DAO.
Yesterday, the GMC and I decided that Rocket Lend is not viable in its current form given the likely success of RPIP-62. (See Discord)
It was very unfortunate that the DAO did not show enough enthusiasm for Rocket Lend when it was first proposed ā in May 2024, i.e. 4 months ago ā to get it deployed quickly. I believe that with a dedicated collaborator we could have deployed on mainnet within 3 months, i.e. 1 month ago. For context, RPIP-62 discussion started at the beginning of August (about 2 months ago). I donāt know how differently the discussion would have gone if Rocket Lend was clearly 1 month away from being live (e.g. was already in audits and/or beta-testing). Maybe it wouldnāt have made a difference. In any case, as it stands there was no dedicated collaborator and funding took 2 months to secure, so Rocket Lend work is stopping now with a timeline of about 1.5 months to mainnet from now because RPIP-62 is eating its lunch.
I am not sure whether to call this a mistake. If I compare both options side-by-side ignoring the context and history, I think RPIP-62 comes out on top. It certainly is a better way to increase RP TVL, since it achieves what Rocket Lend was trying to achieve but with lower risk and simpler UX for users. It is worse from the perspective of encouraging anyone building on top of RP (do we even want that?) and from providing a stable protocol for potential users to depend on (do we want that? maybe we need a stable vision but the implementation details should change to support the mission when new information becomes known?).
I am thinking of voting Against RPIP-62, as a way to signal that it was a mistake to not focus on Rocket Lend (and other legos like Constellation). (I said so here Discord)
However, since Iām not convinced it was actually a mistake, I donāt know if this is what I want to signal. I would love to vote Abstain to capture this state, but unfortunately the proposed vote does not include an Abstain option - Iāll see what Patches does and probably copy that if I decide to go with Abstainā¦
If I didnāt want to use the vote to signal anything about DAO process, I would probably vote For the full RPIP-62 with cliff removal. However, I want to note Iām also wary about the relatively little analysis (compared to the full Saturn proposal) this change has had, and that I havenāt understood the impacts on Constellation (we have seen now the impacts on Rocket Lend). Less analysis for a timeboxed change seems ok. But I really hope there isnāt something in there that can kill RP by surprise before Saturn even gets a chance.
6 Likes
The cliff wasnāt meant to āinsureā the borrowed staked Eth dueā¦ the rpl bond is to volatile to use as insurance especially during a mass slashing event.
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Just giving my personal perspective and thought on how I would likely behave with or without the 10% cliff. My rpl bond is at 3.5% and I started running a pool back in Feb of 22. I tried to maintain a 15-20% bond at first. And then reduced it when I migrated some of my pools to LEB8s. As the collateral value fell I kept trying to top off, but at some point i hit my predetermined limit in terms of allowed alt % vs Eth and had to stop purchasing RPL. I would be more likely to hold my RPL without the 10% cliffā¦ but Iām also loyal enough to keep it with no yield just so I can still voteā¦. But my rational mind tells me that I would be more likely to sell my rpl if I were being diluted every 28 days. Hope this helps
4 Likes
The vote is live and I will be voting strategically.
I intend to withhold my power and use it to push through whichever of āFor Aā or āFor Bā is leading at the end of the vote period.
I would like to vote for the changes while abstaining from the decision on whether to keep the cliff, as I have previously stated that I would not support such a decision, but neither do I wish to block it.
I encourage my delegators who wish to express a preference to override me preemptively.
3 Likes
Voting in favor and for removing the cliff.
This will keep Rocket Pool in the race when Lido Community Staking Module (CSM) launches soon.
Thereāll be no cliff in Saturn so it makes sense not to have one already now. This wrongs node operators who have always dutifully topped up. But thereās no way to make everyone happy so this is like ripping off the bandaid. I believe this will attract more node operators and TVL in the future.
1 Like
Hereās how this affects Constellation:
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We expect (but have not yet tested) that 0 RPL minipools will work with Constellationās design.
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We did not design Constellation for these economics and there may be some disconnect between user expectations if this proposal passes. For example, xRPL holders may reasonably claim that they have the right to ETH flows based on the RPL they are providing, but Constellation does not support this.
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Constellationās temporary node operator bond will need to be increased from 1 ETH to 3.4 ETH because this proposal changes the scrub penalty from RPL to ETH. This will likely decrease the number of operators who can participate in Constellation.
Non-technical, non-NodeSet personal stuff:
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Although I appreciate the benefits of this proposal, I personally see this as a net negative for RP because it represents a step backwards for the security model. I.e. it makes a majority of node operatorsā ETH revenue dependent upon centralized entities (the oDAO) which use the same unaudited code, and it provides no alternative for these users.
I wish these kinds of experiments were done in a different protocol rather than changing RP, and I suspect that decisions like this are why RP is slowly losing community members and NOs. Even if the majority vote in favor, there will be those that leave because of this decision.
Perhaps this decision will reverse that trend. Perhaps that will be temporary. Perhaps TVL growth is explosive and this dissent looks foolish. Perhaps this doesnāt change anything while adding existential risk, causing everything to fall apart. Perhaps this is much ado about nothing because there are no effects. Time will tell
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It really sucks for builders to invest so much work (in our case, years) only to have the economic model changed drastically. I share @ramanaās opinion that RP needs to do a better job of working with rather than against builders. This is not the path to long term success.
2 Likes
This proposal doesnāt do that. Itās a RPIP-63 thing.
1 Like
Itās the majority of commission, which is a big difference. The dynamic commission boost makes up between 12 and 20% of total consensus income for an LEB8. If this was truly a concern, I donāt understand why Constellation would have opted to use the smoothing pool before this change.
1 Like
All right ā time for my votesplanation:
I want to start by saying that I seriously consider all 3 options (For A, For B, Against) quite reasonable here. Iām gonna go through each perspective quickly, then talk about where I end up.
For: Helps increase TVL ahead of Saturn.
For A (keep reward cliff): This does its best to change rules as little as possible. Sckuzzleās data also seemed to indicate that the cliff did create value overall (topping off is bigger than exiting minipools to recollateralize; not too many folks leaving as a result of falling under the cliff). Note that this data may not be a perfect model when the rules change on RPL requirement.
For B (remove reward cliff): This does its best to (1) keep things simple for newcomers and (2) avoid causing pain triggers. Having no cliff means thereās no āoofā event - for good and bad. This means fewer people get a reason to exit (fully or partially to recollateralize) and fewer people get a reason to top off. It also means fewer people are upset-and-take-no-action. For newcomers, itās one fewer thing to explain.
Against: The thought here is that (1) we have constellation incoming and (2) we donāt have that long to go until Saturn 1. From this point of view, this is essentially an unnecessary touch point with little time to yield significant benefits.
Overall: Iām leaning to B. I do think TVL is a huge benefit. If Nodeset gets us there, cool, but I see no reason to not have a second active strategy. Having fewer upset folks is meaningful to me. Fwiw, I donāt see falling below or above the cliff as being that huge a factor in the decision to hold RPL, as I think rewards (especially for a smallish interim period) are dominated by long term expectations. Close call, but Iāll be ranking B, A, Against. As ever, folks that delegate to me are encouraged to overwrite that as they see fit.
1 Like
Based on the lack of ongoing debate, and with only 4 days left, it seems that my vote isnāt needed to ensure a āForā variant wins.
I will now be voting āB/A/Againstā to fulfill on my previous statement.