Decentralization Concerns Arise between Lido, Rocket Pool’s Team

On July 4, a Lido team member called Rocket Pool became too concentrated on social media. Lido and Rocket Pool are liquid staking systems that let users delegate Bitcoin to validators for derivative tokens.

Dmitry Gusakov, Lido’s community staking manager, said that the Rocket Pool team owns the contracts and may change any specifications or procedures.

Rocket Pool developers may unilaterally raise inflation rates or fees by 100%. “Lido’s contracts are fully controlled by [the decentralized autonomous organization] LidoDAO,” Gusakov said. Waq, a member of the Rocket Pool grants management committee, said the team was aware of the issue and would fix it. Waq accused Lido of taking credit for a known problem.

Gusakov’s article states that RocketStorage’s Ethereum address, 0x1d8f8f00cfa6758d7bE78336684788Fb0eeeF46, has a “guardian” parameter.

Numerous Rocket Pool contract functions are marked “only Guardian,” meaning they may only be called by the account provided in this parameter, which is now set to the RocketPool deployer account at 0x0cCF14983364A7735d369879603930Af10df21e.

As Gusakov stated, the “guardian” may change the “RPL Inflation Interval Rate” and “ETH Deposit Fee,” meaning the team can raise the Rocket Pool governance token (RPL) inflation rate or erase users’ deposits by setting the charge to 100%.

The post’s author, Chris Blec, claims that indicates “‘pDAO is not a DAO” or that RPL token holders do not administer Rocket Pool. Rocket Pool community advocate Jasper Lens said the Saturn update would fix this centralization problem.

Jasper said the centralization occurred when Rocket Pool’s DAO voting procedures were being tested. The team decided against on-chain voting for the DAO during testing.

After testing, the Saturn update “is all about patching the decentralization holes.” Waq agreed with Jasper Lens’s post, saying the Rocket Pool community “has been working for over a year to fix this” and that the Lido team will “rush to take the credit like always” once the problem is fixed.

Liquid staking protocols have been popular in recent months. On May 1, blockchain analytics startup DefiLlama stated that these protocols have eclipsed decentralized exchanges as the most valuable category of decentralized finance.

Tenet and LayerZero implemented liquid staking on future blockchains on May 30.