Rocket Pool, the third largest Ethereum liquid staking Protocol by Trade Value Locked (TVL), partnered with Coinbase Companies. According to an announcement on Rocket Pool’s Discord channel, Coinbase Ventures will join Rocket Pool’s Oracle CAD (oDAO).
Rocket Pool is governed by two decentralized autonomous organizations (CAD), with the oDAO being responsible for managing Rocket Pool’s ETH staking nodes and voting on Rocket Pool smart contract upgrades. oDAO members are compensated with Rocket Pool’s governance and utility RPL token.
Planned partnership to increase rocket pool
Analysts believe the new partnership could help Rocket Pool gain ground on the current ETH market leader liquid staking, Pool. According to DeFi Llama, Lido currently has 4.88 million ETH tokens staked through its platform. This compares to just under 360,000 staked via Rocket Pool.
Coinbase Ventures is the venture capital arm of Coinbase, the largest US-based cryptocurrency exchange. Coinbase itself is the second-largest provider of ETH liquid staking services, with 1.042 million ETH tokens currently staked.
That’s why analysts believe the partnership could help Rocket Pool overthrow Lido as the best ETH liquid staking service. “Coinbase is a household name and the fact that their engineers secure the data gives the protocol legitimacy to certain institutions,” said Rocket Pool pseudonym, community advocate Jasper. “Plus, the whole ecosystem is getting a boost,” he added.
It should be noted that according to DeFi Llama, Lido still offers the most attractive ETH staking yield of 5.0% compared to Rocket Pool’s 4.43%. Unless Rocket Pool can close this yield gap, they may struggle to close the gap in TVL.
This may not matter to crypto investors who take a tougher view of decentralization. Rocket Pool is considered by many in the crypto space to be the most decentralized provider of ETH liquid staking services, due to its decentralized governance structure.
In the wake of the partnership, with the recent collapse of FTX the latest reminder of the risks of crypto centralization, and with the upcoming Ethereum Shanghai upgrade in March should allow withdrawals of ETH staked for the first time, Rocket Pool should work well in the coming months.
But some members of the Rocket Pool community have expressed concern about how the influence of a large centralized crypto entity (Coinbase) will affect the governance of oDAO.
RPL hits multi-month highs
RPL, the utility and governance token of Rocket Pool, has rallied in recent sessions. RPL was last changing hands at just under $32 per token, with monthly gains currently around 65%. Traders eye a potential test of pre-Ethereum meltdown highs near $44 in the coming weeks.
News of the partnership with Coinbase Ventures has clearly given prices a boost, while the aforementioned upcoming Ethereum upgrade that will unlock staked ETH withdrawals at the end of Q1 is also giving prices a boost. .
If the broader rally in cryptocurrency markets continues on bets that easing US inflationary pressures and slowing growth will allow the US Federal Reserve to cut interest rates later this year, then the RPL will likely continue its recent upward trajectory.
RPL’s technical outlook is certainly good. The cryptocurrency remains in an aggressive uptrend since the start of the year and recently enjoyed a “golden cross”. This is where the 50-day moving average crosses above the 200DMA, an indicator that some traders consider bullish.