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7.2
Oracle DAO
The Oracle DAO (oDAO) is a collection of trusted Ethereum ecosystem members who perform certain duties on behalf of Rocket Pool that are, as of yet, not able to be automated by smart contract. Oracle DAO members put up a large amount of RPL as collateral and receive rewards from the 5% yearly RPL inflation.
oDAO operates as defined in RPIPs 5, 19, 21, 22, 24, and 25
oDAO Tasks
The oDAO is tasked with oracle duties such as:
Support duties, including:
Propose changes for settings controlled by the oDAO, including:
In being required to propose certain changes to the protocol, the oDAO becomes a check on the contract updates provided by the core team.
oDAO Selection
The original oDAO members:
were selected early in the protocol's life by the core team. Part of the initial selection was to include trustworthy entities from within the crypto community with the hopes that the payout from doing their oracle duties would help fund public goods for their own, or other Ethereum, projects.
Once Rocket Pool was up and running, further oDAO members could only be nominated and selected by the oDAO itself via onchain voting. Later additions voted on and accepted by the original oDAO include:
Members can only be removed by oDAO vote with one exception. If the community feels an oDAO member is not properly fulfilling their duties, they can spend 1 ETH to challenge the oDAO member. If the member does not respond to the challenge, they are kicked from the protocol. So far, there has been one challenge by the community which was reposnded to by the oDAO member and thus they remained on the DAO.
oDAO Funding
The initial supply of RPL was 18,000,000. Each year, RPL undergoes 5% inflation. From this 5%, the oDAO receives a percentage that is evenly divided among all members. Initially, this was 15% of the inflation amount.
As of RPIP-25, the pDAO voted, and the oDAO accepted, ramping down the oDAO funding to 1.5% over several rewards claim periods. The community concluded the funds could be better spent by their management committees and that the oDAO duties were to be lessened, as soon as possible.
oDAO Concerns
The oDAO is a trustful and centralizing entity within protocol. Both of these conflict with RPs stated tenets of increasing trustlessness and decentralization in Ethereum. Perfection has never been the goal and it is important to note that in the beginning, there was no way for the Execution and Consensus layers to communicate, making oDAO duties a necessity.
With EIP-4788 planned for a future Ethereum update, many oDAO duties will finally be able to be written out of the protocol, vastly reducing its already limited influence.
The goal is to do away with oDAO as it becomes possible.
End of lesson 7 and end of course!
Reminder: Take and pass all the quizzes to earn a POAP for this course