Decentralization Debate: Lido Rocket Pool Team Members Square Off

The Controversy Between Lido and Rocket Pool

On July 4, a team member of Lido, Dmitry Gusakov, posted on social media that Rocket Pool is too centralized. Both Lido and Rocket Pool are liquid staking protocols that enable users to delegate their cryptocurrency to validators and receive derivative tokens in return.

Gusakov argued that Rocket Pool’s contracts are controlled by the Rocket Pool team, allowing them to alter any parameters and call any method, including increasing the inflation rate or raising the fees up to 100%. In contrast, he claimed that the same vulnerability does not exist in Lido’s contracts, as those actions are “fully controlled by [decentralized autonomous organization] LidoDAO.”

Waq, a member of the Rocket Pool Grants Management Committee, responded to the accusation, saying that the vulnerability was already known to the team and will be fixed in the future. Waq accused the Lido team of attempting to take credit for discovering an issue that was already known.

RocketPool Governance and Centralization Issues

Gusakov’s post highlighted the fact that the RocketStorage contract at Ethereum address 0x1d8f8f00cfa6758d7bE78336684788Fb0ee0Fa46 includes a parameter called “guardian.” Many functions in Rocket Pool contracts are labeled as “onlyGuardian,” meaning they can only be called by the account listed in this parameter, which is currently set to the RocketPool deployer account at 0x0cCF14983364A7735d369879603930Afe10df21e. This implies that the team can increase the inflation rate of the Rocket Pool governance token (RPL) or remove users’ deposits by setting the fee to 100%.

Content creator Chris Blec shared the post, claiming that it proves “‘pDAO is not a DAO” or that RPL token-holders are not actually in control of Rocket Pool’s crypto now.

In response, RocketPool community advocate Jasper.lens stated that the community is already aware of this centralization issue, which will be patched in the upcoming Saturn upgrade. According to Jasper, the centralization occurred during a period when voting systems for Rocket Pool’s web 3.0 meaning were still being designed and tested. The team decided to not allow the DAO to practice on-chain voting in the initial testing phase. However, testing has now been completed, and the upcoming Saturn upgrade “is all about patching the decentralization holes.”

In a comment agreeing with Jasper.lens’ post, Waq claimed that the Rocket Pool community “has been working for over a year on fixing this” and predicted the Lido team would “rush to take the credit like always” once the problem is fixed.

Crypto now has seen liquid staking protocols grow in popularity over the past few months. On May 1, DefiLlama, a blockchain analytics platform, stated that these protocols have surpassed decentralized exchanges as the top DeFi category in terms of total value locked. On May 30, Tenet partnered with LayerZero to implement liquid staking on more blockchains in the future, part of their aim to build a web 3.0 meaning and media network crypto to further the development of web 3.0 blockchain and top crypto.