RPL Inflation Breakdown
As an extension to the RPIP #003 topic, below are the proposed breakdowns of the RPL inflation, based on different stakeholder groups.
RPIP-003 proposes inflation sitting initially at 5% of total token supply per year to incentivise four key actions within the system:
- Incentivising ETH2.0 staking - Building native inflation incentives for node operators gives Rocket Pool a competitive edge compared to other ETH2.0 staking options.
- Incentivising Deposit Pool Security - Providing incentives to RPL holders who deposit their RPL to the Reserve Pool to provide additional security to the user deposit pool and rETH.
- Incentivising Trusted Nodes - These nodes sit in a meta-group above normal Rocket Pool validators, and transmit ETH2 data back to the ETH1 chain. Incentivising the correct relay of this data is critical to the early phases of Rocket Pool development.
- Ecosystem Incentives - Funding community and ecosystem incentives, for example creating deep liquidity for rETH to be leveraged inside of the DeFi ecosystem, external RPL/ETH liquidity on AMMs, funding Rocket Pool integrations in the wider ecosystem, etc.
RPL Inflation Breakdown:
- During the first year of operation, 5% of total RPL supply equals 900,000 RPL . This inflation is broken down based on the following weightings:
- Validator rewards: 65% (585,000 RPL)
- Reserve pool rewards: 15% (135,000 RPL)
- Trusted node incentives: 10% (90,000 RPL)
- Ecosystem incentives: 10% (90,000 RPL)
While the introduction of inflation may seem like a counter to token scarcity, Rocket Pool is the first & currently the only ETH2 ‘minipool’ enabling protocol. Introducing RPL inflation to reward value-added actors introduces a mechanism for active participants to earn governance weight in line with their contributions to the network.
We invite community feedback on both the breakdown of these allocations, as well as suggestions around different ecosystem incentives to roll out as we move through the launch phase of the Rocket Pool network!