Rocket Pool, the second largest liquid staking protocol by market share has quietly been outperforming its liquid staking peers today. Flying under the radar amongst market participants, Rocket Pool has been working diligently in the background on some key protocol updates.
Introduction
Rocket Pool stands as the leading decentralized platform for Ethereum staking, boasting a network of approximately 3300 node operators across the globe. This accounts for about 30% of all Ethereum nodes internationally.
The platform provides three main services:
- Liquid Staking
- Node Staking
- Solo Migration
Above is a cross comparison of the top 4 liquid staking derivatives. Notably Rocket Pool has led the past 30 days growing 4% in total. This growth may be attributed to several fundamental factors which we will explore below.
Rocket Pool Protocol Upgrades
Withdrawal Address Q1 2024;
In the first quarter of 2024, RPIP-31 proposes the implementation of a dedicated withdrawal address for RPL bond redemptions and RPL reward claims. The purpose of this update is to distinctly separate the handling of ETH and RPL rewards. This move is aimed at expanding the pool of node operators and increasing the use of RPL within the protocol's framework.
Houston Upgrade Q1 2024;
A key feature of the Houston Upgrade set for the first quarter of 2024 is the launch of a completely on-chain Protocol DAO. This innovative framework incorporates an optimistic fraud-proof approach, shifting away from the traditional snapshot voting method towards a model that encourages more widespread and active community participation. The upgrade is designed to further strengthen the principles of decentralization and empower community-led governance.
NodeSet Project Constellation;
Following the Houston upgrade in early 2024, Project Constellation will emerge as a significant enhancement to the Rocket Pool protocol, functioning similarly to a Layer 2 solution for staking protocols. This initiative focuses on creating software that efficiently allocates assets across a decentralized network of node operators, ensuring non-custodial asset management.
Project Constellation introduces notable improvements in terms of capital efficiency and scalability, along with innovative staking methodologies. A key feature is the reduction of bond requirements for node operators, broadening accessibility and encouraging a more diverse participation base. This project introduces xrETH and xRPL as new liquid staking tokens, with xrETH notably offering a 0% commission and full ETH staking Annual Percentage Rate. This presents attractive alternatives compared to other offerings in the market.
The project places a strong emphasis on fair stake distribution, which is pivotal for enhancing network security and robustness. Additionally, it automates the process of mini pool creation and management. This significantly reduces the operational challenges for node operators thereby improving overall efficiency and participation in the ecosystem.
Conclusion
Rocket Pool has been making significant strides in the market. With a substantial global presence of about 3300 node operators it's a key player in decentralized Ethereum staking. The platform is enhancing its offerings with the Houston Upgrade and Project Constellation which are focusing on decentralization, scalability and innovative staking options like xrETH and xRPL. These developments are strongly positioning Rocket Pool within the competitive landscape of liquid staking.
Disclaimer: This research report is exactly that — a research report. It is not intended to serve as financial advice, nor should you blindly assume that any of the information is accurate without confirming through your own research. Bitcoin, cryptocurrencies, and other digital assets are incredibly risky and nothing in this report should be considered an endorsement to buy or sell any asset. Never invest more than you are willing to lose and understand the risk that you are taking. Do your own research. All information in this report is for educational purposes only and should not be the basis for any investment decisions that you make.