Abstract

This RPIP proposes rebalancing RPL inflation allocation to increase protocol funding during and after the Saturn 2 transition.

Before Saturn 2, the current RPL inflation allocation is: Node Operators 70%, pDAO 27.5%, oDAO 2.5%. This RPIP would reduce the Node Operator share and increase pDAO share as follows: Node Operators 50%, pDAO 47.5%, oDAO 2.5% (unchanged).

This RPIP also updates the current internal pDAO allocation (RPIP-69) from: IMC 50%, GMC 25%, Reserve Treasury 25%, to IMC 30%, GMC 40%, Reserve Treasury 30%. Note that these are percentages of the new pDAO share of 47.5% rather than of the old 27.5%.

This bolsters GMC RPL by about 10,000 RPL per cycle and approximately doubles reserve treasury share per cycle compared to previous allotment.

When Saturn 2 takes effect, Node Operator share of RPL inflation is already set to go to zero (RPIP-46). Under the existing Saturn 2 plan, annual RPL inflation would thus fall from 5% to 1.5%. Under this RPIP, elimination of Node Operator RPL rewards will reduce inflation from 5% to 2.5%.

Motivation

Rocket Pool currently faces a protocol funding shortfall.

The decline in RPL price has greatly reduced the GMC’s funding capabilities. The GMC has already made multiple rounds of cuts to support, administration, business development/STAR, marketing and other recurring expenses. However, current funding is now not enough for basic operating costs and does not provide adequate room for upcoming protocol needs.

The pDAO is increasingly asked to fund or help fund items such as support, rescue node costs, business development, Chainlink costs, Saturn 2 related work, Snapshot, and other worthy initiatives. Meanwhile, pDAO funding from megapools is not yet available at meaningful scale and it might be a long time before it becomes helpful at a meaningful level.

Before Saturn 2, 70% of RPL inflation is directed to Node Operator RPL rewards. When Saturn 2 takes effect, those Node Operator RPL rewards will go away entirely. This RPIP proposes a phase out of those rewards pre-Saturn 2 by redirecting part of the current Node Operator RPL issuance to pDAO protocol funding immediately, and to preserve that funding after Saturn 2.

Specification

Pre-Saturn 2

• The reward percentages SHALL be set using the on-chain pDAO proposal system (RPIP-33) to:
  • Node Operators: 50%
  • pDAO: 47.5%
  • oDAO: 2.5%
• The pDAO internal allocation SHALL be adjusted using the on-chain pDAO proposal system and updated in RPIP-10’s Historical budget splits section as follows:
  • IMC: 30%
  • GMC: 40%
  • Reserve Treasury: 30%
• The on-chain votes SHALL be started concurrently and RPL values for the pDAO allocation SHALL be based on the reward percentages vote passing.
• All associated on-chain proposal votes must be passed to implement this proposal.

Post-Saturn 2

• The RPL inflation rate SHALL be set to 2.5% and updated in RPIP-46

• rpl.inflation.interval.rate SHALL be set to the value corresponding to 2.5% annual inflation using the same annualization convention as RPIP-46. The expected value is approximately 1000067606974065369, subject to technical confirmation.

• The reward percentages SHALL be set using the on-chain pDAO proposal system to:

  • Node Operators: 0%
  • pDAO: 95%
  • oDAO: 5%

Rationale

Note about post-Saturn 2 allocations

When Saturn 2 takes effect, Node Operator RPL issuance will still be eliminated as planned in accordance with RPIP-46. As a result, RPL inflation will be reduced from 5% to 2.5% rather than from 5% to 1.5% (simply the effect of eliminating the 50% Node Operator share).

The oDAO and pDAO issuance will remain the same as the above changes dictate. This means the post-Saturn 2 pDAO/oDAO allocation percentages remain consistent with the 95%/5% DAO split already specified in RPIP-46, while the absolute issuance reflects the pre-Saturn 2 oDAO share established by RPIP-68.

Protocol funding need

The GMC’s current funding stream is insufficient at current RPL prices. The GMC has already reduced spending, but continued austerity has limits. Further cuts to support, administration, committee work, and contributor compensation risk weakening the protocol and losing contributors who are already working for modest compensation.

This RPIP is based on the view that Rocket Pool should not solve a structural protocol funding issue only by further reducing compensation to people actively maintaining and improving the protocol.

Node Operator RPL issuance is already transitional

Node Operator RPL issuance rewards are already expected to end with Saturn 2. This RPIP does not create a new long-term direction for Node Operator RPL rewards. Rather, it starts the transition earlier by reducing the Node Operator RPL rewards before Saturn 2, while still preserving a meaningful share until Saturn 2 takes effect.

Timing matters

This proposal is time-sensitive because the current Node Operator RPL share only exists before Saturn 2. If no change is made before Saturn 2, then the 70% Node Operator share remains in place until Saturn 2 and then disappears. At that point, the protocol would need a separate future vote to increase inflation again if pDAO funding from megapools is not sufficient.

pDAO funding from megapools is not yet sufficient

A future pDAO share from megapools may become an important protocol funding source. However, that source is not yet available at meaningful scale. The protocol needs funding during the period before Saturn 2 and may continue to need this RPL funding after Saturn 2 if pdao_share is insufficient.

Minipool operator expectations

A potential concern is that reducing Node Operator RPL rewards before Saturn 2 changes expectations for current minipool operators. This concern should be weighed seriously. However, the reduction affects RPL issuance rewards, not ETH rewards. It also occurs in the context of an already-planned transition away from Node Operator RPL issuance rewards in Saturn 2. The proposal preserves 50% of RPL issuance for Node Operators before Saturn 2 while redirecting the remaining portion towards the pDAO.

RPL value and inflation tradeoff

This RPIP would result in higher post-Saturn 2 RPL inflation than currently specified in RPIP-46. The existing Saturn 2 plan reduces annual RPL inflation to 1.5%; this RPIP would instead reduce it to 2.5%.

Higher inflation can be harmful to RPL value if the additional RPL is spent inefficiently or sold into shallow demand. This proposal accepts that risk because underfunding core protocol needs can also harm RPL value by weakening support, development, growth, and contributor retention.

The intended tradeoff is not “more inflation forever.” It is to preserve protocol funding during a period where other funding sources, including pdao_share, may not yet be sufficient. If protocol revenue or treasury conditions improve, future governance can reduce inflation or revise the pDAO allocation policy.

Security Considerations

This RPIP does not change ETH rewards, validator duties, minipool delegate behavior, megapool mechanics, or validator security assumptions.

The primary risks are economic, governance, and incentive risks:

1. Node Operator expectations: Reducing Node Operator RPL issuance before Saturn 2 may be perceived as changing the expected transition for current minipool operators.
2. RPL value and sell pressure: Increasing the pDAO share and preserving higher inflation than RPIP-46 currently specifies, may increase sell pressure if the additional RPL is spent quickly or inefficiently.
3. Treasury discipline: Larger pDAO, GMC, and Reserve Treasury inflows do not by themselves guarantee better outcomes. Poor budgeting or weak grant oversight could waste the additional issuance.
4. Underfunding risk: If this RPIP does not pass and no alternative funding source is available, Rocket Pool may underfund support, operations, security related work, Saturn 2 work, contributor retention, and growth initiatives.

This RPIP attempts to balance those risks by:

• preserving 50% of RPL rewards for Node Operators before Saturn 2,
• eliminating Node Operator RPL rewards at Saturn 2 as already planned,
• keeping GMC, IMC, and Reserve Treasury spending subject to normal governance and budgeting processes, and
• leaving future governance able to reduce inflation or revise allocations if the additional funding is no longer needed.

Governance Considerations

This RPIP modifies RPL inflation allocation and therefore requires a 75% “For” supermajority under RPIP-25.

Passage of this RPIP should be treated as authorization for five related simultaneous governance actions:

1. A pre-Saturn 2 on-chain pDAO proposal to change RPL claim percentages to 50% Node Operators, 47.5% pDAO, and 2.5% oDAO.
2. A pre-Saturn 2 on-chain pDAO proposal to change recurring IMC spend to reflect the increase to total pDAO allocation and a 30% share of it.
3. A pre-Saturn 2 on-chain pDAO proposal to change recurring GMC spend to reflect the increase to total pDAO allocation and a 40% share of it.
4. An update to the pDAO allocation policy in RPIP-10 to set IMC to 30%, GMC to 40%, and Reserve Treasury to 30%.
5. An amendment to RPIP-46 so that the Saturn 2 rpl.inflation.interval.rate target is 2.5% annual inflation rather than 1.5%. This RPIP changes funding allocation and inflation policy. It does not approve any specific GMC grant, IMC incentive program, Reserve Treasury spend, or other individual expenditure.

Copyright

Copyright and related rights waived via CC0.

Citation

Dr Doofus, "RPIP-81: Rebalance RPL Inflation for Protocol Funding," Rocket Pool Improvement Proposals, no. 81, May 2026. [Online serial]. Available: https://rpips.rocketpool.net/RPIPs/RPIP-81.