In a recent social media dispute, Lido and Rocket Pool, two prominent liquid staking protocols, engaged in a heated argument over the level of decentralization within their respective platforms. Dmitry Gusakov, Lido’s community staking lead, accused Rocket Pool of being overly centralized due to the control its team holds over key protocol parameters and functions.
Gusakov highlighted that Rocket Pool’s contracts allow the team to modify parameters and call methods at will, potentially leading to arbitrary inflation rates and increased fees. In contrast, Lido asserted that their decentralized autonomous organization (DAO), LidoDAO, oversees and controls these actions, ensuring a more distributed decision-making process.
Responding to the accusation, a member of Rocket Pool’s Grants Management Committee named Waq acknowledged the vulnerability mentioned by Gusakov and assured that it would be addressed in an upcoming fix. Waq also criticized Lido for taking credit for identifying an issue that Rocket Pool was already aware of.
The central point of contention lies in Rocket Pool’s “guardian” parameter within its contract, which limits certain functions to be accessible only by the specific account listed as the guardian. These functions include modifying the RPL inflation rate and ETH deposit fees. The concern raised is that this arrangement grants the team significant control over Rocket Pool’s governance token (RPL) and user deposits.
Chris Blec, a content creator, shared Gusakov’s post, suggesting that Rocket Pool’s governance is not truly decentralized. Jasper.lens, a RocketPool community advocate, acknowledged the centralization issue and explained that efforts are underway to address it in the upcoming Saturn upgrade, aimed at patching the existing decentralization gaps in the protocol.
Waq further emphasized that the Rocket Pool community has been actively working for over a year to resolve the centralization issue and anticipated that Lido would opportunistically claim credit once the problem is fixed.
Liquid staking protocols have gained significant popularity in recent months, surpassing decentralized exchanges as the leading category in DeFi based on total value locked. The partnership between Tenet and LayerZero aims to expand liquid staking to additional blockchains in the future.