CryptoIntelligence - Thomas Goldstein2023-07-06 13:33

In a recent social media post on July 4, Dmitry Gusakov, the community staking lead for Lido, accused their competitor, Rocket Pool, of excessive centralization.

Lido and Rocket Pool are both liquid staking protocols that enable users to delegate their cryptocurrency to validators and receive derivative tokens in return.

Gusakov’s post highlighted that the Rocket Pool contracts are under the control of the Rocket Pool team, allowing them to modify any parameters and execute any methods.

This means that Rocket Pool developers possess the ability to increase the inflation rate to an arbitrarily high percentage or raise fees up to 100%.

Gusakov emphasized that such vulnerabilities do not exist in Lido’s contracts since these actions are “fully controlled by [decentralized autonomous organization] LidoDAO.”

He claimed that the Rocket Pool contracts, on the other hand, grant significant control to the team.

In response to these allegations, Rocket Pool management committee member Waq acknowledged the existence of the vulnerability and assured that it would be addressed in the future.

Waq accused the Lido team of attempting to take credit for identifying an issue that was already known to Rocket Pool.

According to Gusakov’s post, the RocketStorage contract at Ethereum address 0x1d8f8f00cfa6758d7bE78336684788Fb0ee0Fa46 contains a parameter called “guardian.”

Various functions within the Rocket Pool contracts are labeled as “onlyGuardian,” indicating that they can only be called by the account specified in this parameter, which is currently set to the RocketPool deployer account at 0x0cCF14983364A7735d369879603930Afe10df21e.

Gusakov explained that actions that can be performed by the “guardian” include altering the “RPL InflationIntervalRate” and the “ETH DepositFee.”

This implies that the Rocket Pool team has the power to increase the inflation rate of the Rocket Pool governance token (RPL) or potentially manipulate users’ deposits by setting the fee to 100%.

The allegations made by Gusakov were shared by content creator Chris Blec, who argued that they demonstrate that “pDAO is not a DAO” and that RPL token holders do not genuinely control Rocket Pool’s governance.

In response, Rocket Pool community advocate Jasper.lens acknowledged the centralization issue and stated that it would be resolved in the upcoming Saturn upgrade.

Jasper explained that during the initial testing phase of Rocket Pool’s DAO voting systems, on-chain voting was not permitted.

However, after completing the testing phase, the upcoming Saturn upgrade is intended to address the centralization concerns.

Supporting Jasper.lens’ statement, Waq commented that the Rocket Pool community has been actively working on fixing the centralization issue for over a year.

Waq also predicted that the Lido team would hastily claim credit for the resolution once it is implemented.

Liquid staking protocols have gained significant popularity in recent months.

DefiLlama, a blockchain analytics platform, reported on May 1 that these protocols had surpassed decentralized exchanges as the leading decentralized finance category in terms of total value locked.

Additionally, Tenet’s partnership with LayerZero on May 30 aims to expand liquid staking implementation to more blockchains in the future.