Rocket Pool — Houston Upgrade
Hello Rocket Poolers :) Today is our 2nd mainnet birthday, and what a few years it’s been! To celebrate that momentous milestone, we’re cramming this article with more updates than you can point a suspiciously oversized stick at.
This article features mind boggling stats of growth since our 1st mainnet birthday a year ago and details on our next major upgraded called Houston that features the first true fully onchain advanced DAO system. To round out the article, we’ve also got some juicy updates on our roadmap and a sneak peek at some initial features for our future Saturn upgrade due to be released next year.
This past two years on mainnet has been a journey! In the last year alone, we’ve continued working alongside the development of staking on Ethereum as withdrawals were implemented. This required us to plan and execute all manner of significant changes. We also released our biggest upgrade to date; Atlas. Since then we’ve been hard at work developing our next upgrade: Houston — while prototyping even more features for the upgrade after that: Saturn… Phew!
While it’s been a busy year, we are still and will always be eternally grateful for the support we’ve received, both from our community and all the others who’ve helped decentralised staking become a real option against a multitude of centralised choices.
Growth
For the second year in a row since we launched, the Ethereum Foundation have recognized that Rocket Pool is still the top pick for the health of Ethereum among staking protocols/pools with virtually all green ticks across the board for criteria they specify as important for a staking provider.
rETH Liquid Staking
We first wrote about liquid staking way back in 2019. Since then, the landscape has evolved to see several LSDs come to market.
rETH is the LSD token of our protocol. rETH represents an equal amount of ETH deposited into the protocol plus an equivalent share of the ETH staking rewards accrued by Rocket Pool node operators. While the balance of owned rETH will remain constant, the balance of ETH backing the token in the Rocket Pool protocol continues to increase. It can also be traded back to the protocol for ETH at any time, provided liquidity is available.
rETH growth over the last year has been fantastic, seeing a 4x growth over the previous year, largely in part to our Atlas upgrade. It scaled Rocket Pool by introducing 8 ETH LEBs (Low Ether Balance) minipools, as an alternative to the previous minimum of 16, which effectively halved the cost of becoming a new node operator.
After our Houston upgrade, we’ll be releasing our Saturn upgrade which is aimed at scaling the protocol yet again in some pretty exciting ways! With the release next year, we expect this liquid staking growth to yet again grow by an order of magnitude.
Node Operators
The backbone of the Rocket Pool protocol are the node operators. Simply speaking, we make running a node and staking on Ethereum a really easy process. Want to stake your own ETH? Simply install our smart node stack. This is reflected by the number of node operators currently operating on the protocol and the near constant rate that they have been joining since we launched.
Rocket Pool currently has a network of around 3,300 node operators, a number which is unrivaled among any staking entity on Ethereum. Our node count is also estimated to be approximately 30% of all Ethereum nodes. These node operators are also incredibly diverse with them being spread over 134 time zones. You can view the current status of the protocol here on our network map. Rocket Pool truly counts significantly towards Ethereums node diversity and health.
If you’re curious about running a node, we highly recommend taking a deep dive into our docs. From hobbyist node operators to full on SaaS (Staking as a Service) professionals, Rocket Pool caters to all and allows you to earn a greater ROI staking your own ETH inside the protocol vs outside of it as a node operator.
TVL
Rocket Pool allows node operators to stake ETH and also RPL as insurance collateral. The growth of the protocol in the second year has seen almost 815,000 ETH staked which is a year on year increase of nearly 300% and over 10,000,000 RPL staked.
Node operators in the Rocket Pool protocol are required to stake RPL as an insurance promise to the protocol that they will be a good node operator, if they are not and incur serious penalties, then their RPL stake is penalised and the protocol is made whole to protect the value of rETH.
RPL has a rate of 5% inflation and currently has a circulating supply of 19,842,000. Approximately 51% of total RPL is currently locked inside the protocol as this insurance collateral for the staked ETH.
Houston Protocol Upgrade
The Houston upgrade is largely aimed at introducing a fully on-chain DAO to govern the protocol, known as the Protocol DAO or pDAO. It is a DAO like no other and it does not require snapshot voting or any other 3rd party tools to function, it is truly onchain and one of a kind, more on that below.
This upgrade will also be introducing some other very exciting features that will allow new integrations and platforms to be built on the protocol. Some of these include the ability to stake ETH on behalf of node (not just from the node itself) and a new RPL withdrawal address feature that can allow the node operator to supply the ETH for staking and another party to trustlessly provide the RPL for the insurance bond.
Protocol DAO
The Rocket Pool Protocol DAO (pDAO) is responsible for shaping the direction of the protocol and is run by RPL governance. Its members and their voting power are made up of node operators, big and small, all of which are directly participating in the protocol.
Typically DAO governance in the wider crypto space is done by token weight voting. Basically, the more tokens you hold for a protocol/project, the bigger your voting power. You also don’t need to be actively participating in the protocol, simply holding the tokens is enough.
This style of governance we wanted to avoid. If you want to help direct and guide the future of Rocket Pool, you need to be actively involved, not just storing tokens in a cold wallet. From the biggest Venture Capitalist funds to your ordinary guy running a single minipool, you will need to be actively participating in the protocol to help govern it.
Currently the protocol DAO has control over a variety of on-chain settings that are used in the protocol. New Rocket Pool Improvement Proposals (RPIP) can be made and voted on by these Node Operators within Rocket Pool. You can see the current RPIP registry here. If you’re a devil for the details, the current RPIP for the on-chain protocol DAO talked about now can be found here.
What can the pDAO do?
The pDAO has control over many settings of the protocol, it can spend treasury funds and in our Houston upgrade, it comes with a new security council to help react quickly in the event of any potential issues with the protocol. Lets talk about each of those a little more below.
Protocol Parameters: These control certain facets of the protocol such as the setting that controls the minimum ETH amount that can be deposited for rETH (currently 0.01 ETH) or even controlling the maximum size of the deposit pool, this is how much max ETH can be deposited into the protocol before being assigned to node operators for staking. You can find a full table of these settings here.
Treasury Funds: RPL has a 5% inflation rate and a portion of that is allocated to the pDAO treasury. The pDAO have the ability to spend this treasury on a variety of protocol orientated endeavors, from funding development of the protocol directly, grants management for funding 3rd party improvements and projects that make use of Rocket Pool and more. Our Houston upgrade adds a new ability where these payments from the treasury can be done not just in a lump sum manner, but in a progressive manner to help track goals in relation to on going funding.
Security Council: As the Houston upgrade moves the pDAO to a fully on-chain system, a new safety measure was introduced in the form of the security council. These members can be elected by the pDAO and they have the ability propose and execute changes quickly to pause the protocol in the event any potential issues occur. Quorum is met among members must be met for any security response proposals to be executed. The pDAO also has the power to remove members or disband the security council entirely if they need to.
Proposals and Voting
For any governance system to function, there needs to be proposals and voting. At the moment, snapshot voting is used for these settings and proposal changes, then some manual intervention is needed to execute the changes. With the introduction of the Houston upgrade and RPIP-30, this is moved to a new optimistic fraud-proof system that allows any node operator to raise, vote on or challenge proposals, directly on chain without the need for any 3rd party tools.
Proposing: Any node with a non-zero voting power may raise a proposal at any time. When doing so they must lock an proposal bond in the form of RPL for the entire proposal process.
Challenging: If a node that created a proposal has been found to have done so with incorrect data required, they can be challenged and the challenger must provide a bond for the challenge. The node that makes the challenge can be rewarded with the proposers bond made when creating the proposal if successful, however if they have made an invalid challenge, the proposer can collect their challenge bond.
Voting: If a proposal passes the period where it can be challenged, it enters the voting period. Node operators can then choose to vote in one of the follow flavours:
- Abstain: The voter’s voting power is contributed to quorum but is neither for nor against the proposal.
- For: The voter votes in favour of the proposal being executed.
- Against: The voter votes against the proposal being executed.
- Veto: The voter votes against the proposal as well as indicating they deem the proposal as spam or malicious. If the veto quorum is met, the proposal is immediately defeated and the proposer loses their bond. This is to dissuade spam, low quality proposals, or proposals that have not gone through off-chain processes first such as signalling by snapshot voting.
Once both voting periods have passed and the proposal is successful, the proposal can be executed and the change is applied to the Rocket Pool protocol.
After the proposal has passed the voting periods, the proposer may unlock their RPL bond, unless the proposal was defeated by a challenge or vetoed.
Stake ETH on Behalf of a node
This allows an account to stake ETH on behalf of a Rocket Pool node that is registered in the protocol. This supports a variety of situations where the node operator is not directly providing the ETH:
- Enhanced security for node operators, as they can stake directly from their hardware wallet, eliminating the need to transfer funds to the node beforehand.
- Staking as a Service providers where custody of funds are managed by a trusted custodian.
- Protocol integrations where custody of funds are managed by smart contracts.
- DAOs or organisations where custody of funds are managed by a treasury.
While the primary aim of this feature is to facilitate single depositor scenarios, it’s worth noting that multiple independent depositors can also leverage this capability by creating smart contracts layered on top. Rocket Pool also introduced the ability to stake RPL on behalf of back in our previous Atlas release.
RPL Withdrawal Address
Rocket Pool currently allows node operators to specify a withdrawal address for their ETH and RPL. This could be an external hardware wallet or something similarly secure.
With this new addition, you can set a withdrawal address for your ETH and a new one for your RPL if you wish. The RPL withdrawal address if set will be able to trigger and claim RPL from inflation rewards and will have no effect on ETH consensus rewards or anything related to ETH.
This creates some interesting opportunities where RPL can be trustlessly supplied by an entity to a node operator that does not wish to have exposure to RPL. That entity can then claim RPL rewards for putting up the required insurance collateral for the node.
Audits
The Houston release is due to be audited by our two main audit partners, Sigma Prime and Consensys Diligence in late November. Both of these audit teams have audited all of our previous releases.
But as we are always extremely security conscious, we are introducing a new 3rd auditing team in the form of Chainsafe, the team behind the Lodestar consensus client. They have a history of auditing projects such as Gnosis Safe and 1inch. They will begin auditing in January after the first two audit partners finish.
Road Map
Well if you think we’re taking a break after Houston, think again :) We’re actively working on our road map with help from the community and undoubtedly, the biggest attraction on that is our future Saturn release due roughly in Q2 2024.
Saturn
This upgrades primary focus is scaling the protocol yet again, similar to our Atlas release which saw a massive spike in Rocket Pool growth after it was released. Currently we are in the research phase for the following to be included in this release:
Megapools: Current validators in Rocket Pool are called minipools, these are commonly made up of 8 ETH from the node operator and 24 ETH from rETH liquid stakers. Each minipool is its own smart contract and it contains all the logic to handle all ETH/RPL interactions for that minipools balances.
The drawback for this is the expense in creating a minipool as it is a smart contract. While we’ve implemented many optimisations to this process to reduce costs significantly, it can still be improved more.
Megapools would allow you to control many validators from a single smart contract. This will significantly reduce setup costs for validators within Rocket Pool, and it will also open up many other possibilities.
You can read more about this in our research post here.
ETH Required: Our Atlas upgrade in early 2023 lowered the ETH required to create a Rocket Pool minipool from 16 to 8 ETH. In Saturn we are aiming to reduce this even further while benefiting the protocol and our node operators, but crucially maintaining safety and security. We are researching two possible changes below that would achieve this.
The first approach is to reduce the ETH bond from 8 to 4. This requires more research to ensure it can be implemented safely (MEV theft can impact low bonded validators), and additionally it might require the implementation of trustless forced exits in the Ethereum spec.
The second and pretty exciting approach is the new ETH flex bond (naming still a wip :) This would see a flexible amount of ETH required, with a possible minimum of just 1 ETH required for a validator in Rocket Pool. We’re still in the early research phase of this, but it looks promising and could result in phenomenal scaling of the protocol.
Questions or just say hello!
Well 99 points to you for making it this far, that was a whopper of an update and you made it through! If you have questions, feedback, bug reports or want to know a bit more about us, why not swing by for a chat and say G’day! You can view our website or have a chat with us in our Discord chat room that anyone can join. If chat rooms aren’t your thing, we’re also on Twitter!
About Rocket Pool
Rocket Pool is Ethereum’s most decentralised liquid staking protocol and the second largest. Its 3,300+ worldwide node operators have staked over 816,800 ETH!
Liquid stakers can participate by depositing as little as 0.01 ETH to receive the rETH liquid staking token. Rocket Pool is a fully non-custodial solution, and its node operators are economically-aligned to perform well for stakers.
Joining as a node operator is fully permissionless and requires just 8 ETH (instead 32). For more information check out our node operator guide.
The Rocket Pool team have been in the staking space since its inception in 2016, which gives them a pedigree and track record without peer.
Take a look at the Rocket Pool website | Join the Rocket Pool community on Discord | Stay up to date with the latest news on Twitter | View all links on our Linktree
