Tensions are heating up between two liquid staking protocols, Lido and Rocket Pool.
Dmitry Gusakov, Lido’s community staking lead, has publicly accused Rocket Pool of excessive centralization in a social media post dated July 4th.
According to Gusakov's claims, Rocket Pool's contracts are predominantly managed by its own team, granting them significant influence over system parameters and operations. This control reportedly allows Rocket Pool's developers to adjust key variables, such as inflating the rate to any arbitrary value or ramping up fees to a staggering 100%.
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Gusakov stated that Lido's system doesn't have this vulnerability because all decisions are "fully controlled by <decentralized autonomous organization> LidoDAO."
Rocket Pool’s management committee member, Waq, countered Gusakov’s allegations, arguing that the team was aware of the vulnerability and had plans to rectify it. Waq accused Lido of attempting to capitalize on a known issue.
According to Gusakov's post, a parameter named "guardian" is present in Rocket Pool's RocketStorage contract, with another function, "onlyGuardian," invoked only by the account listed in the parameter.
The "guardian" function can alter the "RPL InflationIntervalRate" and the "ETH DepositFee," which Gusakov suggests could potentially allow the team to drastically increase the Rocket Pool governance token (RPL) inflation rate or confiscate users' deposits by setting the fee to 100%.
Content creator Chris Blec echoed Gusakov's sentiment, suggesting that it proved that Rocket Pool's governance was not genuinely decentralized, or "'pDAO is not a DAO," as he put it.
Rocket Pool's community member Jasper.lens responded by asserting that the community was already aware of the centralization issues. The community member claimed that all "decentralization holes" should be plugged during the forthcoming Saturn upgrade.
Liquid staking protocols, such as Lido and Rocket Pool, saw their popularity skyrocketing over recent months. Blockchain analytics platform DefiLlama noted on May 1st that these protocols had overtaken decentralized exchanges as the leading decentralized finance category in terms of total value locked.
The public exchange between Lido and Rocket Pool reveals the complexities and potential pitfalls of centralization within liquid staking protocols. As these platforms continue to evolve and grow, so will the scrutiny from the community and competitors alike.
