stETH or rETH: The two mechanisms and yield logic of Ethereum liquid staking after Glamsterdam upgrade

Ethereum is at the intersection of protocol upgrades and market structure reshaping. The Glamsterdam hard fork is scheduled to activate on the mainnet in the first half of 2026—Soldøgn Interop in early May 2026 has set a target of a 200M Gas cap, with official deployment expected in the coming months. This is not just a technical iteration but could also serve as a catalyst for the evolution of the liquid staking landscape. Meanwhile, divergences between liquid staking protocols are becoming increasingly clear: on one side, the efficiency-first path represented by Lido; on the other, Rocket Pool’s commitment to decentralization. The tension between them is being pushed to a new node as Glamsterdam upgrades reshape staking reward structures, MEV transparency, and block space efficiency.

Glamsterdam Upgrade and the Liquid Staking Landscape

Glamsterdam is a coordinated hard fork updating both the execution layer and consensus layer of Ethereum, planned for activation in the first half of 2026, with the exact mainnet launch depending on testnet stability and client implementation progress. The upgrade combines two code names—“Amsterdam” for the execution layer, “Gloas” for the consensus layer—advancing synchronously within the same hard fork. Its core goal is not feature addition but a redefinition of Ethereum’s base layer block production, validation, and economic incentive systems.

Liquid staking has become the dominant DeFi sector. As of May 2026, total TVL in liquid staking is about $40 billion, with Lido controlling roughly $19.1 billion, representing about 48% market share. Rocket Pool’s TVL is significantly smaller than Lido’s—about a 20-fold difference in scale.

However, scale is not the sole metric for protocol value. Against the backdrop of Glamsterdam’s imminent rollout, the divergence in protocol strategies and token valuation logic warrants deeper analysis.

From Merge to Glamsterdam: The Evolution of Staking

To understand the current landscape, it’s helpful to trace the evolution of Ethereum’s staking ecosystem:

• September 2022: Ethereum completes The Merge, shifting from PoW to PoS. Liquid staking protocols emerge, but staked ETH remains non-withdrawable.

• April 2023: The Shapella upgrade enables withdrawal of staked ETH, triggering explosive growth in liquid staking. Lido quickly gains market leadership through first-mover advantage and deep DeFi integration of stETH.

• March 2024: The Dencun upgrade, with EIP-4844, significantly reduces Layer 2 data availability costs, indirectly boosting staking demand amid ecosystem prosperity.

• Late 2025: Fusaka upgrade introduces PeerDAS and EOF, increasing block gas limit from 45 million to 60 million—about a 33% increase in network throughput.

• February 18, 2026: Rocket Pool deploys Saturn One, its largest protocol upgrade to date. It lowers the minimum ETH stake from 8 to 4 ETH, introduces MEGAPOOL architecture to reduce gas costs, and activates the RPL Fee Switch—directly distributing a portion of protocol ETH revenue to RPL stakers.

• Mid-March 2026: The US SEC issues an interpretive ruling clarifying that Ethereum staking rewards are not securities. This clears regulatory hurdles for staking ETFs and provides a compliant basis for institutional capital to enter ETH staking.

• First half of 2026 (targeting Q3 mainnet): Glamsterdam is set to activate, bundling several high-impact EIPs, notably EIP-7732 (ePBS—protocol-internal proposer-builder separation) and EIP-7928 (BALs—block-level access lists), and expanding block gas limit from 60 million to 200 million. Notably, EIP-8080 (exit via merge queue), previously highly discussed, has been formally rejected in Glamsterdam planning, replaced by EIP-8061.

Comparing stETH and rETH in Three Dimensions

Based on data up to May 2026, a quantitative comparison of Lido and Rocket Pool across three dimensions: TVL & market share, decentralization, and APY & fee structure.

Dimension 1: TVL & Market Share

| Metric | Lido (stETH) | Rocket Pool (rETH) | | --- | --- | --- | | Liquid staking TVL | ~19.1 billion USD | Significantly less than Lido (~20x scale gap) | | Market share of liquid staking | ~48% | Much lower than Lido | | Share of total staked ETH | ~22.8% | Less than 1% | | Governance token | LDO | RPL | | Token price (as of May 21, 2026, Gate data) | ~0.3628 USD | ~1.744 USD |

Lido’s scale advantage mainly stems from the DeFi network effects of stETH: deep integrations of stETH/wstETH into major protocols like Aave, Curve, MakerDAO for lending, liquidity pools, and collateral channels, forming a “liquidity flywheel”—deeper liquidity attracts more users, which further reinforces liquidity depth.

Rocket Pool’s TVL remains much smaller, but post-Saturn One, there are signs of structural improvement. As of May 7, 2026, about 60,160 ETH are staked in megapools. The Saturn One upgrade led to a significant revaluation of RPL, though the price later retreated—indicating ongoing market divergence on the valuation of decentralized protocols.

From a macro perspective, as of April 2026, approximately 32% of ETH supply is staked. The total staked ETH continues to grow, enlarging the “pie,” but yields are compressing—base APY is around 2.75%, gradually declining as staking ratio increases.

Dimension 2: Decentralization

Decentralization is the fundamental divergence between Lido and Rocket Pool, representing core staking philosophies.

Lido’s node operation adopts a “curation” model: Lido DAO selects and approves professional node operators, who manage all validators. It is expanding decentralization modules; by Q1 2026, the Community Staking Module (CSM) has registered 524 node operators, with a CSM staking cap increased to 7.5%. CSM operators currently secure about 1.5% of all staked ETH.

Rocket Pool employs a permissionless model: anyone holding 4 ETH (before Saturn One, 8 ETH) and corresponding RPL can run a node and validate. Its node operators are distributed across roughly 70 regions, far exceeding other Ethereum staking providers.

Decentralization measurement involves not just node count but also the distribution of validators per node. Lido’s few operators manage many validators, while Rocket Pool’s nodes are more dispersed—offering structural advantages in censorship resistance and fault isolation at the validator layer. Conversely, Rocket Pool’s distributed operation can lead to variable validator performance; a recent proposal (RPIP-73) aims to identify about 12% of underperforming validators.

Governance-wise, Lido uses LDO tokens to vote on protocol parameters and node operator admission; Rocket Pool employs a two-tier voting system to prevent large stakeholders from dominating decisions.

Dimension 3: APY & Fee Structure

The environment for liquid staking yields is experiencing systemic compression. As of April 2026, the base issuance APY is about 2.75%. Including transaction fees and MEV, most validators’ total APY ranges from 3.5% to 5%. Retail users’ net yields after platform fees are even lower.

Comparison of fee and reward distribution:

| Metric | Lido (stETH) | Rocket Pool (rETH) | | --- | --- | --- | | Protocol fee | 10% of staking rewards | ~14–15% of staking rewards | | Fee allocation | To Lido DAO treasury | To node operators and protocol (part allocated via Fee Switch to RPL stakers) | | Estimated user APY | ~2.5%–3.4% | ~2.8%–3.2% | | Node operation minimum | Not publicly open (except CSM) | 4 ETH + RPL collateral | | MEV transparency & potential yield | Moderate (depends on operator config) | Higher (via smoothing pools) |

Rocket Pool’s higher fees are split between node operators and protocol. The activation of Saturn One’s RPL Fee Switch further alters value capture—part of protocol revenue is directly distributed to RPL stakers, turning RPL tokens into cash flow-bearing assets rather than purely governance/staking tokens.

Post-Glamsterdam, EIP-7732 (ePBS) will embed proposer-builder separation at the protocol level, with builders submitting bids directly to the consensus layer. The winning builder’s block payload is written on-chain before proposer broadcast, creating a permissionless, transparent block-building market. Protocols capable of actively managing MEV strategies may gain additional revenue—early estimates suggest MEV extraction could decrease by about 70%. Under ePBS, Rocket Pool’s smoothing pools might better capture MEV volatility profits and reduce operator risk exposure.

Centralization Concerns and Decentralization Narratives

Discussions about Lido and Rocket Pool are not new, but since 2026, several key events have reignited this debate.

Lido’s market share concentration raises concerns at the Ethereum Foundation level

Lido controls about 48% of liquid staking TVL. This concentration has attracted broad community attention. Excessive staking via a few protocols and node operators could lead to implicit validator centralization—clashing with Ethereum’s decentralization ideals.

Rocket Pool’s decentralization cost is slow growth

Despite its decentralization advantages, Rocket Pool’s TVL remains far below Lido’s. Critics argue that decentralization alone doesn’t guarantee user adoption. RETH’s DeFi integrations are less extensive than stETH’s—stETH’s collateral role on Aave is nearly unassailable, while RETH’s lending and liquidity pools are still developing.

Glamsterdam may narrow the efficiency gap

Some analysts believe Glamsterdam benefits both protocols differently: ePBS’s transparent MEV market could enhance Rocket Pool’s smoothing pools’ yield capture; meanwhile, the Fee Switch reduces exit friction, easing migration from stETH to rETH—an important risk mitigation for users holding rETH with potentially lower liquidity. However, others note that Lido’s modular staking architecture and ongoing community staking module iterations are also moving toward decentralization, suggesting the paths of the two protocols may converge over time.

Industry Impact: Competition, Governance, and Revaluation of Token Value

Impact on the liquid staking competitive landscape

Glamsterdam’s upgrade shifts the core competitive dimensions. Before, the focus was on TVL, DeFi integration, and user habits—areas where Lido’s moat was strongest. Post-upgrade, the focus expands to MEV capture efficiency and fair block space utilization.

For Lido, efficiency gains are incremental. Its core advantage—liquidity network effects—remains intact: even if validation efficiency improves, stETH’s role as DeFi collateral is unlikely to diminish. But the upgrade opens space for competitors to differentiate and close the gap.

For Rocket Pool, the upgrade creates structural opportunities. ePBS’s transparent MEV market could make its smoothing pools more competitive in yield capture. The RPL Fee Switch turns the token into a cash flow asset, potentially attracting valuation frameworks similar to dividend-paying assets.

Impact on token economics

LDO: current price around $0.3628 (as of May 21, 2026, Gate data), down 59.70% over the past year. Market cap approximately $308 million, fully diluted valuation about $403 million, total supply 1 billion. LDO’s value depends on whether Lido can sustain its dominance in liquid staking and whether TVL growth hits a ceiling. Its fees flow into the DAO treasury, governed by LDO holders, but LDO does not directly capture protocol revenue like RPL. If Lido’s market share faces increased competition post-Glamsterdam, its valuation support may weaken.

RPL: current price about $1.744, down 65.77% over the past year. Market cap roughly $39.15 million, fully diluted valuation about $59.4 million. Unlike LDO, RPL benefits from the real ETH revenue capture via Fee Switch—part of protocol income is distributed to RPL stakers, giving it a cash flow characteristic. However, RPL’s inflation risk due to supply model requires ongoing monitoring of whether protocol growth can offset supply inflation.

Multi-Scenario Evolution: Three Paths After Glamsterdam

Based on the above, here are three possible scenarios following Glamsterdam’s upgrade:

Scenario 1: Efficiency Deepening, Landscape Continues

Glamsterdam upgrades smoothly, ePBS operates stably but does not significantly alter MEV revenue distribution. Lido maintains about 40–48% of the liquid staking market share, leveraging its DeFi network effects and institutional staking channels. Rocket Pool benefits modestly from Saturn One’s 4 ETH node threshold and Fee Switch, achieving gentle growth, but the scale gap with Lido remains large.

Key assumptions: Efficiency improvements are shared equally among protocols, not creating competitive differentiation; institutional staking continues to favor stETH due to deeper liquidity and broader integration.

RPL/LDO performance: Both tokens’ valuations are driven mainly by TVL growth rather than share redistribution. RPL, with a lower base, may grow faster in percentage terms but remains much smaller in absolute size.

Scenario 2: Decentralization Premium Emerges, Partial Reshaping

Community concerns over staking centralization lead to governance actions—e.g., Ethereum Foundation shifting more ETH to decentralized protocols. The improved exit mechanisms reduce migration friction from stETH to rETH, prompting some community and institutional flows toward Rocket Pool.

Key assumptions: Rocket Pool’s node network continues expanding; rETH’s DeFi integration makes substantive progress; CSM expansion cannot fully dispel decentralization criticisms.

RPL/LDO: RPL may see a relative valuation rebound due to decentralization premium, contingent on real ETH revenue growth from Fee Switch.

Scenario 3: Competitive Elevation, New Paradigm Emerges

Glamsterdam triggers a paradigm shift: ePBS’s on-chain builder market fosters new types of staking protocols focused on MEV optimization; or re-staking protocols (like EigenLayer, which already dominates re-staking at 93.9%) merge with liquid staking, creating new models. Both protocols face competition from “MEV-optimized staking” and “re-staking integrated” solutions.

Key assumptions: The technological impact exceeds expectations, with rapid adoption of ePBS and new MEV strategies becoming core differentiators. Token prices are influenced by multiple factors: fundamental TVL growth, new entrants siphoning market share, and valuation shifts from narrative to cash flow models.

Conclusion: Philosophy or Efficiency?

The choice between stETH and rETH is, on the surface, a comparison of two liquid staking tokens, but fundamentally reflects a philosophical debate about Ethereum’s future governance. Lido embodies an efficiency-first approach, leveraging curation and deep DeFi integration to build network effects; Rocket Pool advocates permissionless participation and distributed validation.

Glamsterdam’s significance lies in resetting the technical parameters of this competition: more transparent MEV markets, more efficient block space use—these changes may marginally recalibrate the cost-benefit equations of both philosophies. But whether decentralization commands a market premium ultimately depends on a deeper question: how much are Ethereum ecosystem participants—retail stakers, institutional investors, DeFi protocols—willing to pay for “decentralization”?

Until that answer is clear, the coexistence of stETH and rETH exemplifies Ethereum’s resilience: two philosophies competing and balancing, jointly constructing a more censorship-resistant staking ecosystem. This long-term narrative in the liquid staking race remains the most compelling.