Abstract

This proposal simply increases the Protocol DAO setting that controls the limit on the amount of waiting ETH that can be present in the deposit pool.

Motivation

Increasing the deposit pool limit will allow for more efficient and larger deposits by Institutional, DAO, and private whale depositors into the deposit pool. As an example, to reach our unofficial goal of becoming 22% of the amount of ETH staked on the beacon chain (2.8M ETH) we would require 650 full deposit pool deposits at the current setting. We’re at 200k ETH, so we’d need to another 2.6M. Since each deposited ETH is matched with an NO ETH, (2.8M - 200K) Total ETH * (1 depositor ETH / 2 Total ETH) * (1 max deposit / 2K depositor ETH) = 650 max deposits. Increasing the limit to 5k would allow us to accomplish the same in only 260 full deposit pool deposits.

Specification

The Core team will execute bootstrapSettingUint on the RocketDAOProtocol contract updating the deposit.pool.maximum pDAO setting to 5000 ether (5000000000000000000000).

Rationale

This proposal is to increase the deposit pool limit to 5,000 ETH from the current setting of 2,000 ETH. The max limit was designed to restrict the amount of the regular ETH left unstaked, thus nonproductive at generating returns. Increasing the deposit pool limit does present a small potential reduction risk on the rETH APR (by ETH_in_DP/rETH_TVL_in_ETH) but only occurs when the deposit pool has a positive balance (would currently represent ~5% reduction with a full 5k DP). This is acceptable and further mitigated by modeling that suggests plentiful NO supply, which would make a full DP unlikely.

The proposal was discussed and the impact assessed in the Proposal to increase the deposit pool dp limit DAO forum post.

Backwards Compatibility

No backwards incompatibility. The current limit is 2000 ETH so even if the deposit pool was full we are increasing not decreasing.

Test Cases

This is a very low risk change. The deposit pool limit setting has already been used during deployment to ensure a phased rollout. The deposit pool limit has been increased to 5K ETH on the Goerli testnet already but we can construct the transaction payload and execute against Goerli to ensure it has the desired effect. A post verification check will be performed after deployment - we will query the Protocol DAO contract for the value and check Rocket Scan.

Reference Implementation

Not applicable.

Security Considerations

Increasing the deposit pool limit mildly increases the possibility for a flashloan style attack but for this to occur there would have to be an exploit present that yielded some value: no known exploit exists that would yield value and this has been carefully considered by auditors. It does make arbitarge opportunities slightly more profitable but the deposit pool is still limited and so these are very mild concerns.

Copyright

Copyright and related rights waived via CC0.

Citation

Ken Smith, Darren Langley, "RPIP-9: Increase Deposit Pool Limit," Rocket Pool Improvement Proposals, no. 9, August 2022. [Online serial]. Available: https://rpips.rocketpool.net/RPIPs/RPIP-9.