Coinbase Ventures Joins Rocket Pool’s Management DAO

Coinbase Ventures Joins Oracle DAO

It was revealed on the 31st that Coinbase Ventures, the investment arm of the US major crypto asset (virtual currency) exchange Coinbase, will officially participate in the governance mechanism “Oracle DAO” of Rocket Pool, a liquid staking protocol.

Rocket Pool is the third largest liquid staking protocol for Ethereum (ETH). Issue “rETH” as a derivative token. “Total Value Locked (TVL)”, which indicates the total amount deposited in the protocol, has doubled in 2023, reaching 441,296 ETH, approximately 100 billion yen ($800 million) (at the time of writing).

An Oracle DAO is a group of authorized node operators responsible for administrative tasks not covered by smart contracts. Coinbase Ventures will receive rewards as Oracle DAO in its own token RPL.

Rocket Pool distinguishes itself from other liquid staking by allowing anyone to become a node operator. It takes 16 ETH to become a node operator and acts as an Ethereum validator by configuring another node and a minipool.

These nodes will receive all staking user fees and will also earn Rocket Pool’s governance token RPL as a separate reward. On the other hand, it is necessary to deposit 1.6 ETH worth of RPL as collateral separately, and it will be used to compensate for the penalty (slash) that occurs in Ethereum when the node stops.

As such, RPL tokens have three main utilities on Rocket Pool: staking rewards, insurance, and governance.

It was first reported in January 2011 that Coinbase Ventures would join the DAO (Decentralized Autonomous Organization) involved in the operation of Rocket Pool.

The only way to join Oracle DAO is by invitation from an existing member. Some Rocket Pool Discord members are concerned that 9 of the 18 organizations participating in the Oracle DAO are based in the US, and some say they would like to accept non-US entities.

connection:Explaining “LSD (Liquid Staking Derivatives)” that enables operation while staking Ethereum

What is Liquid Staking?

Liquid staking is a mechanism that allows you to receive derivative tokens (LSD) issued 1:1 through smart contracts and operate them in DeFi (decentralized finance) while receiving cryptocurrency staking rewards.

According to data site DUNE, liquid staking accounts for 42.97% of the total staking volume on Ethereum (consensus layer). Notably, Lido Finance is not only the top share of the ETH liquid staking market (74.2%), but also the top share of the overall Ethereum staking market (31.2%).

Increased usage of Rocket Pool, backed by Coinbase Ventures, could ease the concentration of top provider Lido Finance in the Ethereum (ETH) liquid staking market.

It is argued that if a particular protocol were to stake a large portion of the ETH in circulation, it would encourage a cartelization of validators and ultimately pose a threat to the Ethereum protocol. Several analysts, including Ethereum developers, have sounded the alarm about the oligopoly of the staking ecosystem.

On the other hand, Ethereum is approaching the scheduled implementation date (April 12) of its next major upgrade, “Shapella”. After the Shanghai implementation, the staked Ethereum withdrawal function will be implemented.

connection:Ethereum “Shanghai”, mainnet implementation date decided