Rocket Pool —Protocol DAO Governance Phase 0
Rocket Pool has a vibrant community. Over the last 5 years, it has developed a unique culture and created enriching relationships between its members.
Governance is important for all protocols but for Rocket Pool is it a manifestation of our shared values and a passion for Ethereum staking.
The Rocket Pool protocol is governed by a two DAO structure. The first of these DAOs is the Protocol DAO (PDAO) — representing users who have engaged in the protocol and helped it grow. The second is the Oracle DAO (ODAO) — made up of well-respected members of the staking ecosystem which provide a valuable service for the protocol and help govern important upgrades to it.
Since launch, our main focus has been delivering our exciting Redstone (post-merge) release, but we have progressively laid down the foundations for the Protocol DAO.
Protocol DAO (PDAO)
The PDAO is a community DAO based RPL governance. It has off-chain and on-chain elements that combine to give it the following powers:
- Raise and support governance proposals
- Spend the PDAO treasury
- Potentially change certain protocol settings
For phase 0, the PDAO will have no direct on-chain power. This is to limit the governance power until it is mature and stable enough to take control. The Core Team will affect this power at the behest of the PDAO.
Public discourse is essential for governance. Rocket Pool’s community has been instrumental in the development of the protocol. The Rocket Pool Discord is fertile ground for ideas, suggestions and coordinated action. Often ideas will be discussed in social channels such as #trading and then migrate to their own threads under the #governance channel.
A formal governance forum was set up to harness this discourse and allow external parties to contribute. It has seen an explosion of activity on every possible subject, from PDAO budgets, new integration proposals, through to branding.
To turn discussion into action, you first need to determine true community support for a proposal. A robust mechanism for voting needs to be in place.
Voting
A community proposal to implement Snapshot voting was raised, discussed, and developed. Snapshot voting has become the defacto standard across Web3. It is easy and accessible.
We have launched the Rocket Pool Snapshot voting site: https://vote.rocketpool.net
At Rocket Pool we are very aware that token voting in Web3 has problems. These include:
- Unaligned actors taking over governance
- Whale influence
- Low voter participation
- Vote buying
Rocket Pool benefits from RPL’s use within the protocol. A node operator’s effective RPL stake qualifies them for governance voting power. Only those who are actively contributing to the Rocket Pool protocol have governance power. The prospect of unaligned actors directly taking over governance is greatly reduced.
It is inevitable that large Rocket Pool node operators (whales) will hold significant governance power. They are strongly economically-aligned with the success of Rocket Pool and this is a good thing. Problems arise when they dominate the vote at the expense of small-scale operators. To mitigate this, the design of the governance power scoring takes the square-root of their effective stake. The larger their effective stake the less per RPL voting power they have. The idea is to temper their influence allowing voting blocks of smaller operators to influence the vote.
To combat low voter participation, a common approach is to use vote delegation. In this way, a constituent who does not have the time to engage in the community actively, can delegate their vote to a value-aligned representative and have their vote counted.
rETH representation was discussed but the practicality of rETH voting is extremely difficult, open to gaming, and is likely to yield very little participation. Consequently, we are focusing on node operators but will look to introduce some rETH mechanism in the future. If you would like to read more please check out the discussion.
How it works?
To get involved in Rocket Pool governance you will need to set your voting address from your node. This is a one-time action that delegates voting to another address so they can vote on behalf of your node.
$ rocketpool node set-voting-delegate <address>
The address you use, depends on whether you are voting yourself or you are delegating your vote to an official delegate. If you are voting yourself, you will set this address to a browser-based Ethereum address (Metamask or hardware wallet). If you are delegating to an official delegate then you will follow the instructions below.
DO NOT ENTER YOUR NODE ACCOUNT/MNEMONIC INTO METAMASK. The voting delegate feature is to support security of your node.
If you are an Allnodes user you can use your node account as the voting address.
At anytime, you can reassign your voting power by setting the voting address from your node.
One limitation of Snapshot is that you must have delegated before the proposal you would like to vote on is created. So we suggest that you set up your voting address or delegate early so that you don’t miss any proposal votes.
Official Delegates
We want everyone to participate in deciding Rocket Pool’s future but we are aware that people have lives — it isn’t always possible to be active in the Rocket Pool community. For our part, we will distill and communicate proposals to help the community make informed decisions. If you feel you would prefer to delegate your vote, you can delegate to a value-aligned representative.
To support this process, we are launching a Delegate Profile page. Official delegates can nominate themselves by adding their profile to this page. Official delegates should describe why the community should delegate their vote to them. The Delegate Profile page will be opened to beta testers shortly (on Goerli). Once we have gathered and applied feedback it will be ready to invite official nominations.
We will also create a delegate introduction channel within Discord.
To be eligible to become an official delegate you must be a node operator with an effective RPL stake.
Choose your delegate wisely — large node operators already have a large influence.
The Future
A governance process is a complex system that is difficult to reason about ahead of time. Governance is hard and so it will be a continuous journey.
Phase 0 is a sandbox that facilitates discovery and experimentation but will give agency to community initiatives, reward contributors, and drive Rocket Pool forward.
We are excited to be working with the community and developing the governance process further.
