Rocket Pool is a first of its kind Ethereum Proof of Stake (PoS) infrastructure service, designed to be highly decentralised, distributed and compatible with staking in Ethereum 2.0. It was first conceived in late 2016 and has since had several successful public betas over the life span of ETH2 development.
The staking network allows any individual, business, defi dapp, wallet provider, SaaS provider, exchange — just about any service — the ability to provide their users with the option to earn staking rewards on their ETH holdings without worrying about maintaining an extensive staking infrastructure.
This is a “quick” high level overview of what it’s all about. For a much more in-depth guide to Rocket Pool’s features and decentralised network, be sure to read our current whitepaper here or drop into our busy Discord chat room. Oh and don’t forget to checkout all the latest updates on our website!
Rocket Pool — General
- What is Proof of Stake?
A brief overview of what Proof of Stake is and why it is awesome.
- What does Rocket Pool do?
A quick introduction into what Rocket Pool actually does.
- Why would I need to use it?
Good question and hopefully even better answers.
- How does it work?
Smart contracts, smart nodes & decentralised infrastructure.
- What tokens does Rocket Pool use?
We use three tokens. RPL, rETH and nETH. Find out more here.
- Who’s making it?
It not aliens or lizard people. Well, fairly sure anyway.
Rocket Pool — Staking
- What is the minimum deposit?
I’ll save you a scroll, it’s 0.01 ether.
- What is the maximum deposit?
I’ll save you another scroll, there is no limit.
- What are the staking periods?
None for both stakers and node operators. Come and go as you please.
- How much does it cost to stake with Rocket Pool?
If we could do it for free, we would :)
- How do you keep my funds safe?
Our top priority! We have lots of features in place.
- How are rewards generated on a deposit? What is the return?
OK, expect your mind to be blown.
- How can I access my deposit + rewards before ETH2 Phase 2?
I heard something about withdrawals not being allowed for a while…
- What is a decentralized staking network?
It is a very good idea to be part of a decentralised staking network.
- Are your smart contracts audited and open source?
For sure! Audits and bug bounties coming out the wazoo.
Rocket Pool — Node Operators
- Why would I run a Rocket Pool smart node vs going solo?
Half the ETH required to do so and extra rewards, boom!
- What is the minimum staking amount for a node operator?
It’s 16 ETH, would you like to know more?
- What is involved in running a Rocket Pool node?
Some ETH and uptime, uptime, uptime.
- How is the RPL token used?
You can stake RPL on your node too!
Rocket Pool — Integrated dApps, Business and more
- Why would I want to offer our users proof of stake services?
All the benefits of staking in ETH2 with none of the infrastructure required!
Rocket Pool — Contact
Contact us here via email or just read up on Rocket Pool.
Drop by for a chat and ask some questions, we’re a friendly bunch.
Chat rooms not your thing? We post all updates here too!
You’re reading it :) But there’s a few more articles to be found…
Rocket Pool — General
What is Proof of Stake?
Proof of Stake is a consensus protocol coming to Ethereum in 2020. Currently Ethereum uses the Proof of Work (PoW) protocol, which you may have heard of before, because Bitcoin uses PoW. With a decentralised blockchain, these consensus protocols help keep everyone on the same page, so we all know what transactions have been processed and in what order.
Ethereum will transition to a new Proof of Stake (PoS) chain called the beacon chain, which is faster, more energy efficient and more decentralised than PoW. It’s powered by users depositing ETH and providing an Ethereum node online 24/7 to perform the required validation. As a reward for providing the node, the beacon chain gives node operators additional ETH on top of their deposits. It can be viewed similarly to earning interest in a bank account, with the exception these rewards are generated in return for helping secure the network.
What does Rocket Pool do?
Rocket Pool is a decentralised staking infrastructure service that will allow users, dapps and businesses to earn rewards on their ETH holdings using the beacon chain, Ethereum’s new PoS chain due in 2020. The Rocket Pool smart contracts are the heart of the network and they help assign deposits for staking to decentralised node operators who do the staking for you.
Why would I need to use it?
Rocket Pool removes several high barriers to entry that will exist with Proof of Stake on the Ethereum 2.0 network 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.
- Depositing ETH with the beacon chain will also require the user to have knowledge on how to interact with smart contracts. Rocket Pool handles all interactions with the beacon chain for you.
- Ethereum 2.0 is being rolled out over several phases. Depositing during the early phase 0 or 1 means your deposit is locked until phase 2 arrives which could be several years. With Rocket Pool you instantly get our rETH token when depositing, this is a tokenised staking deposit which gains rewards over time and doesn’t need to be locked with us. It can be traded/sold/held at anytime providing our users with liquidity. It will be able to be traded for staked ETH in phase 2.
- The beacon chain will require a user who makes a deposit to be technically proficient at running an Ethereum node 24/7 and keeping that node online + secure. Rocket Pool has a decentralised network of independent Ethereum node operators that provide this service.
- The beacon chain will penalise users who make a deposit but fail to keep their node online. Rocket Pool socialises any penalties or losses that occur on nodes across the whole network which minimises the effect greatly for any single user.
- Some users may be confident in running their own node but do not have the 32 ETH required for the deposit. If they join Rocket Pool’s decentralised network of Ethereum nodes, they only need 16 ETH minimum to solo stake. They also get the added benefit of receiving extra income from the network for providing this service which generates a higher ROI than staking solo.
How does it work?
Hold tight, this is a meaty one! Rocket Pool is primarily composed of 3 main elements, Smart Contracts, the Smart Node Network and Minipool Validators.
Our Smart Contracts accept ETH deposits, assign them to node operators, issue + track various tokens and handle interactions with the beacon chain. They can also detect if a smart node in the network has gone down and will automatically disable it from receiving any new users until it is repaired.
Our Smart Node Network is a decentralised network of special Ethereum nodes that run our Smart Node software. They feature custom background processes that allow them to communicate with Rocket Pool’s smart contracts, and just as importantly, provide the network consensus required by the beacon chain.
Any user can run one of these smart nodes and stake their own ETH fee-free if they have the minimum 16 ETH required. For providing the Rocket Pool network with a smart node, the user also receives extra rewards from the network on top of the rewards they earn staking their own ETH.
Minipools Validators are another smart contract, but these are worth defining on their own due to being such a key aspect of Rocket Pool. These are smart contracts that are created by node operators who deposit 16 ETH on their node. When they do this, their minipool contract receives 16 ETH in deposits from users who just want to stake but not run a node. When this contract contains a total of 32 ETH, that amount is sent to begin staking and at the same time a new validator is created on the node which performs the consensus duties for that deposit to earn those staking rewards, neat!
View the visual guide below to get a glimpse of how these components work together in the Rocket Pool network.
What tokens does Rocket Pool use?
RPL — Rocket Pool Protocol Token
RPL is the primary protocol token and can be staked on a Rocket Pool node if you wish to provide the network with an additional security promise. It is not required to run a smart node or as a user to stake ETH on the Rocket Pool network.
There is some more information here: How is the RPL token used?
rETH — Rocket Pool Staking Deposit Token
When a user deposits into the Rocket Pool network, they will instantly receive the rETH token which represents a tokenised staking deposit and the rewards it gains over time in the Rocket Pool network.
This token does not need to be locked within the network and it can be traded, sold or held as the user desires. It also importantly provides Rocket Pool users with liquidity over Phase 0 and 1 of the ETH2 rollout in which any staking deposit is locked until Phase 2, which does not have any set date as yet on the ETH2 rollout map.
When smart contracts are natively enabled on ETH2 during Phase 2, a smart contract will be deployed that will allow users with the rETH token to burn it for ETH.
Who‘s making it’?
Rocket Pool was originally started in late 2016 by David Rugendyke, a senior developer with over 18 years commercial experience and a computer science background.
In May 2017, an alpha version of the product was released. A vibrant community started to form and the team began expanding.
Today there is a great team working on Rocket Pool passionately alongside a fantastic community. Both have helped Rocket Pool run two public betas with over 50,000 ETH (testnet) staked and hundreds of users participating over the last 1–2 years.
With Ethereum 2.0 on the horizon, Rocket Pool is aligning its battle-tested platform to begin staking as a decentralised network.
Rocket Pool — Staking
What is the minimum deposit?
Rocket Pool allows anyone to earn rewards on deposits as low as 0.01 ETH.
What is the maximum deposit?
As big as you can manage, unlimited.
What are the staking periods?
If you just want to stake you will receive our rETH token when you deposit. You can then do as you want with this token, it will still gain staking rewards over time and can be sold/traded or held until phase 2 of the ETH2 rollout where it can be traded in for ETH on the new Ethereum 2.0 blockchain.
If you want to run a node in the network, you can stake as a node for as little or long as you wish. The longer you stake though, the bigger the commission you get as it is generated from the staking rewards earned on your node over time.
How much does it cost to stake with Rocket Pool?
The main commission that node operators are awarded in the Rocket Pool network is variable and based on the capacity of the network. So it can go from very low to higher depending on how many deposits are arriving into the network, their size and how many node operators are available to accommodate these new deposits.
How do you keep my funds safe?
Our smart contracts are responsible for holding and moving funds. In the interest of trust, they are open source for all to analyse. Additionally, before the smart contracts are deployed to mainnet they will be fully audited and a bug bounty program will be run to ensure the best level of security.
Rocket Pool is a decentralized network of node operators. Your deposit will be allocated to a node operator who will perform Proof of Stake duties. Node operators are required to stake as much ETH as they are assigned — this means they have skin in the game; they are highly incentivised to perform their duties diligently due to this economic bond.
As a staker in the network, all losses from penalties or slashing conditions that occur from deposits landing on very poor nodes are socialised. This means that the entire network absorbs the penalties, rather than one user suffering 100% just due to bad luck that their deposit ended up on a bad node. Also if a seriously bad node operator ends up with < 32 ETH, but > 16 ETH after staking, it means they’ve suffered extended downtime, so the network itself is compensated from the node operators original 16 ETH deposit which adds further protection to stakers deposits.
All Rocket Pool contracts have also been uniquely designed to allow them to be upgradable. If an issue does arise with a smart contract, it can be seamlessly replaced sans bugs.
How are rewards generated on a deposit? What is the return?
Great question! The beacon chain is under development so this is a provisional answer.
The Ethereum Proof of Stake system rewards validators (node operators) with rewards on their deposits; this reward is paid for through new issuance of the ETH currency. The reward return depends on the total amount of validator deposits that are currently staking. You can see estimated staking rewards here, under “Staking Rewards”.
What is a decentralized staking network?
Rocket Pool is a decentralized network of node operators. Each node operator is a separate entity with their own server infrastructure. Having this heterogeneous network is important for:
- Fault tolerance — failures only affect a small number of nodes
- Scalability — by opening up the network it means a huge number of nodes can be brought online to meet demand
- Quadratic Leaking — this is a fancy term for how the beacon chain punishes validators for being offline. As a node operator, if you go offline with a big group of other validators your punishment is greater — this deters centralised staking services.
How can I access my deposit + rewards before ETH2 Phase 2?
If you are a staker and just sending your deposit to Rocket Pools smart contracts, you will instantly receive rETH tokens which are a form of tokenised staking, they will still gain rewards over time, but you don’t need to hold them with us and can trade/sell or hold them as you wish.
If you are a node operator in the Rocket Pool network, when you logout, you will receive nETH. This is a 1:1 token that represents your deposit + rewards + commission earned in network. So if you deposited 16 ETH as a node operator and received 18 nETH when logging out, it means you made 2 ETH in rewards and commissions. This nETH token will be phased out in Phase 2 of the ETH2 rollout and will be replaced with native ETH during this time.
Both the rETH and nETH tokens will be redeemable for ETH during Phase 2 of the ETH2 rollout when smart contracts are deployed to enabled this. During this interim though, they can be sold/traded/held as both are standard ERC20 tokens.
Are your smart contracts audited and open source?
We wouldn’t want it any other way. Before our smart contracts are deployed to mainnet they will be comprehensively audited by a third-party. We’ve run 2 public betas too date with at least 1 to 2 more due in 2020. Anyone can also view our smart contracts at our github repo!
Rocket Pool — Node Operators
Why would I run a Rocket Pool smart node vs going solo?
As a node operator, you can take advantage of the following benefits:
- You require only 16 ETH to stake (as opposed to 32 ETH solo), since Rocket Pool assigns 16 ETH of user deposits. You can also stake 16 ETH deposits multiple times on the one node.
- You earn extra rewards by charging Rocket Pool users a set percentage of the rewards earned on your node. This commission amount is variable and determined by the current capacity of the network when your node receives a deposit. If the network is under a lot of demand and you make a 16 ETH deposit, you will get a higher commission for helping out when needed the most.
- You stake your own ETH, free from any commissions.
- You are always in control of your own node.
- You can come and go anytime from the network. You’ll receive nETH when you do which backs your deposit + rewards earned.
What is the minimum staking amount for a node operator?
The minimum staking amount for a node operator is 16 ETH. But you can easily stake in multiples of 16 ETH on your own node using our smart node software.
What is involved in running a Rocket Pool node?
As a node operator you will need to run a server 24/7 performing proof of stake validator duties. We help you set up your server quickly and easily by providing installation packages that install everything you need to start. We will also be providing cloud provider devOp playbooks for easy setup on the most common cloud hosting providers such as AWS, Rackspace and more.
Apart from that you just need the prerequisite ether deposit (16 ETH) and RPL, which is determined on deposit.
How is the RPL token used?
RPL is the primary protocol token and can be staked on a Rocket Pool node if you wish to provide the network with an additional security promise. It is not required to run a smart node on the Rocket Pool network.
Node operators that stake RPL on their node with at least one minipool validator running, are providing the network with an additional security deposit and in turn earn an extra commission from the network proportional to the size of their security deposit. If they fail to perform their network duties and through penalties or slashing conditions end up with < 32 ETH from their original 32 ETH deposit, their RPL security deposit is burned proportional to their ETH losses for failing to provide the promised additional security for their node.
Rocket Pool — Integrated dApps, Business and more
Why would I want to offer my customers proof of stake services?
If you’re a dApp, you can integrate directly into Rocket Pools smart contracts to stake ETH that your dApp might hold. You’ll instantly receive rETH (a tokenised staking deposit) back when depositing which can be used as your dApp wishes. You now have staking in a decentralised dApp using a decentralised staking network, whoa!
If you’re a SaaS (Staking as a Service) provider, you might want to maximise returns for your users. Spin up a few smart nodes in the Rocket Pool network and put that ETH to work earning staking rewards + extra commissions from users in the Rocket Pool network for this service.
Are you a wallet or DEX and want to give your users the ability to stake their ETH but not leave your service? Just write a smart contract that can manage depositing ETH into Rocket Pool on your users behalf and then receiving rETH back instantly. Bam! Staking services delivered.
There’s lots more possibilities, Rocket Pool is a permissionless smart contract based staking network, anyone can plug into it. Your users don’t even have to know you’re using us, that’s entirely up to you!
Questions or just say hello!
Well this turned out a bit longer than expected, 10 points to you for making it this far! If you have questions or want to know a bit more about us, why not swing by for a chat and say G’day! You can view our website or have a chat with us in our Discord room that anyone can join. If chat rooms aren’t your thing, we’re also on Twitter!