I’m coming around to your point of view.
I went looking for a reason to use RPL first and came up mostly empty.
Reward scaling was almost a reason, but nope.
I thought a good reason might be that validator rewards all scale with validator balance. See this link (thanks to @a35u for that source).
In other words, we should take RPL first, if that lets us minimize how much the validator can drop below 32. Imagine a 16+1.6 minipool. If we use 1.6 ETH of RPL as insurance and then 1.6 ETH as insurance, that would present half the drag on APR as if we first used 3.2 ETH of insurance.
However… that’s just not how it actually works. We’re not literally removing ETH, we’re just relabeling it. So in the case above, we’re decrementing NO_ETH by 3.2 and incrementing Protocol_ETH by 3.2 in the same minipool validator - the actual balance doesn’t change, so rewards don’t change.
If we leave it ETH-first, it would position RPL as having several functions:
- Unlocking commission (this only requires the minimum effective stake, and only when starting a minipool)
- Governance (maybe scales with a function of effective stake - see Snapshot Voting)
- Fallback collateral (this gets stronger with more effective stake, but we believe it’s strong enough at minimum effective stake)
- In-kind yield (scales with effective stake)
I think this is sufficient utility.