In 2022 I did an analysis on the Rocketpool token (RPL). Two years later, we now have the data to compare to the original theory. In this thread I'll take a quick look at how the original idea actually held up. 🧵

The original theory predicted that the price of RPL would be correlated with the first derivative of the validator count (or put another way - the rate of new validators coming online). This means I would expect price to increase during adoption, but drop off again as the protocol matured.

In the article I presented a graph of expected validator count vs the price of RPL.

The validator count would follow your typical adoption S-curve.
While price would form a bubble centered on the steep part of the S-curve.

Things played out similar to this prediction so far (left: prediction, right: actual data)

Turns out the correlation coefficient is around 0.58, meaning the derivative can explain 33.6% of the price movement. I'd classify this as a moderate correlation.

In case you're wondering this is very much a *lagging* indicator, so its not useful for trading the asset.

For the reasoning why this relationship exists, check out the original article from 2022 on my site:

For the reasoning why this relationship exists, check out the original article from 2022 on my site: https://htlc.io/rpl-value-model