Proposal to add rETH/wstETH to the Gauge Controller

Gauge Proposals
#1

Summary:

Proposal to add rETH-wstETH factory pool on Ethereum to the Gauge Controller to enable users to assign gauge weight and mint CRV.

References/Useful links:

• Website:

• Communities:

Protocol Description:

The Rocket Pool (RP) protocol is a decentralized Ethereum 2.0 Proof of Stake infrastructure service. Without staking pools, only wealthy network participants who meet the 32ETH threshold are rewarded for validating transactions. Rocket Pool democratizes participation in network validation by providing a service that lowers the wealth threshold. Abstracting staked ETH as rETH, participants can retain commodity properties of their stake (transfer of ownership).

Unlike beacon chain ETH, rETH can be freely transferred and traded as it implements the ERC-20 interface. Further, unlike competing stETH by Lido, rETH passively gains value against ETH. This ratio is updated regularly by the oDAO—an oracle DAO composed of major ecosystem players such as Etherscan, Bankless, Prysm, and more.

Lido produces the stETH and wstETH tokens. The wstETH token acts just like rETH – allowing users to passively gain ETH staking rewards. The stETH-ETH Curve pool is one of the largest by TVL. However, the Lido network does not allow for permissionless node operators. All validators are hosted by a select set of nodes. As such, rETH provides decentralization support in a unique way.

There are 2 primary users in RocketPool:

rETH Stakers

Stakers can deposit as little as 0.01 ETH in exchange for rETH. rETH is a redemption token representing staked ETH. This token can be burnt at the Rocket Pool contract or website in exchange for ETH and accumulated staking reward. They do not need to run a machine. The returns are subject to a commission to node operators, which is a % of the staking rewards earned.

Node Operators

Node Operators deposit 16 ETH, along with a minimum 1.6 ETH worth of RPL tokens as collateral to stake on behalf of the pool. This is permissionless, so anyone can run a node as long as they have the infrastructure and collateral. They will receive RPL inflation rewards, as well as ETH commission from the pool, along with staking rewards on their own 16 ETH.

The rETH and stETH token’s price histories can be found roughly on coingecko, however, the most liquid price for rETH is found here with the oracle price dictating the rETH deposit pool. The wstETH price is reported by Lido oracles here.

Motivation:

Curve is the ideal DEX for stable pair swaps, given its like-pair swapping curve. The current majority player in curve staked ETH space is stETH. Introducing a complementary pair will allow users to retain full staked ETH exposure while reducing the overall ecosystem’s reliance on a single liquid staking token. Curve users will benefit by having options for staking exposure and an efficient way to switch between staking providers. This is a leap forward for an industry currently bottlenecked in liquid choices.

Specifications:

    1. Governance:

Rocket Pool is soon going to transition to token-based governance through the RPL token. The power of this governance will be very limited. As the protocol makes this transition, the team has implemented a bootstrap mode that gives a guardian address the ability to upgrade contracts and adjust settings unilaterally. However, token contracts and minipool delegate contracts are not upgradable by the guardian or oDAO meaning their impact on the rETH token is limited even if compromised.

The oDAO member address list can be found here. The guardian address is 0x0ccf14983364a7735d369879603930afe10df21e.

Lido DAO governs a set of liquid staking protocols with Lido on Ethereum among them. The Lido
DAO decides on Lido’s key parameters (e.g., fees) and executes Lido upgrades. The Lido DAO
members govern Lido to ensure its efficiency and stability

Provide current information on the protocol’s governance structure. Provide links to any admin and/or multisig addresses, and describe the powers afforded to these addresses. If there are plans to change the governance system in the future, please explain.

    1. Oracles:

Both Rocket Pool and Lido utilize oracles to report the proper rewards for respective liquid staking tokens. A detailed overview of the Rocket Pool oracle network can be found here.

    1. Audits:

Rocket Pool

Lido

For Rocket Pool the major centralization factor is in the oDAO. Its functions are very limited though and the actors involved are all major ecosystem figures. For Lido, the node operator set is not permissionless and so the validator share falls among a select few. To counter this, Lido is working to expand their set of validators and transition long-term to a decentralized solution.

    1. Market History:

Neither asset has had any major negative market event. The curve pool was just launched with seed liquidity of 12 ETH at a balance of 9 rETH and 3 wstETH. This has established the rETH/wstETH exchange rate at 1.0381 vs the ‘true’ ratio of 1.0450. We expect this gap to narrow as much more liquidity is provided in the near future.

Add guage to rETH/wstETH pool?

  • Yes
  • No
  • Abstain

0 voters

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