Rocket Pool (RPL) Soars with High-Volume Rally, Speculation on Re-staking

Rocket Pool (RPL) experienced a significant rally, pushing its price above $30. 

This surge, characterized by the second-highest trading volume in its history, has placed RPL near its upper trading range. Despite a subsequent retreat to $27.25, community enthusiasm remains strong, fueling hopes for another rally. 

The Rocket Pool project has garnered attention due to its potential involvement in the liquid re-staking trend, a significant value driver in DeFi. Although re-staking rumors remain unconfirmed, the community is actively discussing the possibility. The immediate catalyst for RPL’s rally is the Houston upgrade, which is set to go live on Monday.

Houston upgrade and re-staking possibilities

The Houston upgrade addresses several technical issues related to addresses and transactions within Rocket Pool. A vital component of this upgrade is the implementation of OnChain pDAO. This RPIP-32 proposal allows an address to deposit ETH to a node, enabling the node to make deposits using the provided tokens. 

While the Houston upgrade has not detailed specific use cases for this staking mechanism, potential applications include third-party pools and smart contracts for ETH deposits. Other possibilities are staking-as-a-service, DAO treasuries, and custodial intelligent contracts. These developments could increase the value locked in Rocket Pool and facilitate the creation of re-staking protocols. 

Any ETH deposited will be accounted for separately and can be withdrawn at any time. This new protocol aims to boost Rocket Pool’s value, currently at $4.45 B. Rocket Pool has been trending since May, driven by the appreciation of Ethereum (ETH) and anticipation of the Houston upgrade.

Tokenomics overhaul

Rocket Pool is preparing to update its tokenomics, removing RPL as a reward for node operators and reducing inflation from 5% to 1.5%. Node operators will no longer need to hold RPL stakes. Instead, they will hold RPL selectively for voting rights. Fees in RPL will be either redistributed to the DAO or burned. 

Rocket Pool’s requirement for RPL holdings drove demand for the token over nearly three years. Now, RPL must rework its inflows and value proposition. Some predictions suggest that RPL could become more valuable despite not being a requirement for running nodes. This tokenomics overhaul aims to position Rocket Pool competitively within the Ethereum network, which already supports multiple nodes among more than one million validators. Rocket Pool is outperforming other Liquid Staking Token producers by offering re-staking options.

Rocket Pool hopes to expand its influence and value following the Houston update and the upcoming Saturn update. As of June, ETH has a supply exceeding 500,000 and trades at a premium of $3,965.03. After the tokenomics update, supporters anticipate a rise in RPL prices with the introduction of token burns.

Future ambitions and competitive landscape

Rocket Pool aims to outpace other protocols securing the Ethereum network, a goal dependent on the value locked and the potential introduction of Layer 3 or re-staking. Based on market capitalization, RPL is the second-largest liquid staking protocol after Lido DAO. 

The recent rally, which saw RPL’s price increase by 35% in the past week, reinforces the token’s strong market position. Rocket Pool’s continuous developments and strategic updates are poised to maintain its relevance and competitive edge in the evolving DeFi landscape. The community’s response to these changes and the technical advancements from the Houston upgrade will be crucial in determining Rocket Pool’s future trajectory.

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