Liquid staking $ETH with Rocketpool Following the merge, Ethereum staking has been made possible through a number of platforms, such as centralized exchanges, rocketpool, and Lido, to name a few. In this article, we will focus on Rocketpool.
What is RocketPool
RocketPool (RPL) is the first decentralized Ethereum staking pool (protocol) run by the community, offering liquid staking across a permissionless network of node operators.
Rocket Pool removes several high barriers to entry that exist with Proof of Stake on Ethereum 2.0 for both individuals, groups, and businesses. The Beacon Chain requires a deposit of at least 32 ETH. Rocket Pool will allow anyone to earn rewards on deposits as small as 0.01 ETH.
Rocket Pool lets anyone run a validator. Instead of providing 32 ETH, a validator with Rocket Pool needs 16 ETH and 20% of the value of RPL, the Rocket Pool token. Besides earning a yield on their own ETH, validators also earn commissions and rewards in RPL.
Liquid staking token (rETH)
rETH is the LSD token of RocketPool. rETH represents an equal amount of ETH deposited into the protocol plus an equivalent share of the staking rewards accrued by the node operators in the protocol. While the balance of owned rETH will remain constant, the balance of ETH backing the token in the Rocket Pool protocol continues to increase. It can also be traded back to the protocol for ETH at any time, provided liquidity is available.
RocketPool token (RPL)
RPL is used as an insurance collateral promise. Rocket Pool allows node operators to stake ETH and also use RPL as insurance collateral.
Node operators in the Rocket Pool protocol are required to stake RPL as an insurance promise to the protocol that they will be a good node operator, if they are not and incur serious penalties, then their RPL stake is penalized and the protocol is made whole to protect the value of rETH.
RPL currently has a circulating supply of 18,900,000 and an inflation rate of 5%. Approximately 40% of all RPL is currently locked inside the protocol in less than a year as insurance collateral for the staked ETH.
Why you should stake on Rocketpool
Rocket Pool has received endorsements from several reputable auditors, such as Sigma Prime and Consensys Diligence. The protocol is considered secure and fully operational.
The Ethereum Foundation recognizes Rocket Pool as officially battle-tested, making it the only staking option to get green ticks across the board for all criteria they specify as important for a staking provider.
Rocket Pool currently has a network of around 1,700 node operators, which is more than some competing layer 1 protocols. Their node operators are also incredibly diverse, being spread over 101 time zones. You can view the current status of the protocol here on our network map.
How to stake on RocketPool
- Install the Metamask browser extension. Just visit https://metamask.io/ and follow the links.
- Add the rETH Token to MetaMask. you’ll need to add the rETH token contract to it. Open MetaMask. Click on the import tokens and search for rETH then import it.
- Go to the https://stake.rocketpool.net Rocket Pool staking UI site to stake ETH for rETH
- Connect your wallet. Click the select wallet button in the middle of the page, then select connect metamask. MetaMask will prompt you to select an account to connect with the website. Choose one, confirm some permissions, and you’ll see your account blockie along with your ETH and rETH balances.
- You’ll need ETH to stake for rETH.
Just enter an amount of ETH to stake into the form in the middle of the page and click “Start.” You’ll see a MetaMask window asking you to confirm your transaction. Go ahead and click confirm, and after a short wait, you’ll see your balances update!
If you received less rETH than the amount of ETH you put in, that’s normal. rETH and ETH have a dynamic exchange rate, which goes both ways. As the network earns rewards, 1 rETH will become worth more than 1 ETH, which in turn means 1 ETH will buy less than 1 rETH.
Once you have staked ETH and received rETH, you won’t be able to move or unstake the rETH tokens straight away, this is a security function built into the protocol to help prevent sandwich and flash loan attacks. Fear not though, it’s just a short delay, which is 24 hours by default; after that, you can move them as much as you wish.
This is just as easy as staking. Simply head back to the staking UI website and click the arrow button on the trade form to switch to trading rETH for ETH. Then enter the amount of rETH to burn, click Start, and confirm the transaction!
You’ll notice that even though ETH 2.0 withdrawals aren’t implemented yet (and validator balances are locked away), you can still claim your ETH. This works because you’re actually burning your rETH for excess ETH that is still in the deposit pool, waiting to be assigned to nodes. Effectively, you’ve traded your staking position with a stranger who’s just started staking. Neat!
01node is a high quality staking and validation service headquartered in Romania. We have the expertise and time tested infrastructure as a highly secure and reliable node. Our track record shows this reliability, We prioritize great focus on security and we ensure the best practices for every service we offer. We aim to provide the best performance and reliability through our physical infrastructure collocated in tier-3 datacenters.
We are a team of highly skilled and dedicated professionals with decades of experience in the fields of software development, IT infrastructure, cryptography, and financial services. Our existing validator nodes have secured value on several POS networks since their inception such as Terra, Iris, Solana, Cosmos, Quicksilver, Xpla, E-money, IOV, Solana, Skale, Secret Network, Oasis, Nomic chain, Near Protocol, and others who will soon launch like Celestia.
Our community has an active voice in how we participate in the decentralized ecosystem, and our combined strength will propel the project towards a successful future. We vote on most of the governance proposals, and consult with our delegators before this, it’s important to note that we always vote on what is best for the network.
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