Rocket Pool — The Merge & Redstone
Hello Rocket Poolers! Today we’re exciting to announce Redstone! This is Rocket Pool’s first major upgrade since launching to mainnet. This significant upgrade has been the result of listening to community feedback, researching merge changes that we can utilise for the benefit of all current users and adding a sprinkle of new ideas which we feel will help everyone combined.
Before we delve into the Redstone details, it’s important to understand exactly what The Merge ™️ entails for those of you who are new to the space or those who just want a refresher. Redstone’s improvements tie directly into some of the new changes the The Merge ™️ brings, so we’ll begin by giving a rundown on what is possibly Ethereum’s biggest change to date since it launched nearly 7 years ago.
The Merge ™
All blockchains require a consensus mechanism to make sure that transactions that occur on that particular chain can be agreed upon by all participants in a decentralised network. That’s what makes blockchains work!
Ethereum began its life in July 2015 using Proof of Work consensus, this is the same consensus mechanism that Bitcoin currently uses and is the foundation of the Ethereum blockchain we all know and love. The PoW consensus mechanism though isn’t very environmentally friendly as it quite often uses large amounts of electricity.
Since that launch of Ethereum, the Ethereum Foundation and its collective of researchers and developers have been hard at work preparing for an eventual transition to Proof of Stake, away from Proof of Work. This new consensus mechanism has many new benefits, including being much more environmentally friendly.
On December 1, 2020, the Beacon Chain was launched as Ethereum’s first step toward Proof of Stake, it has since existed as a separate blockchain to mainnet, running in parallel.
The next significantly major step in finally transitioning to Proof of Stake is known as The Merge ™️ and is potentially expected (not locked in as yet) to occur around mid September 2022. The Merge ™️ represents the official switch to using the Beacon Chain as the engine of block production and main consensus mechanism for Ethereum. Mining using Proof of Work will no longer be the means of performing consensus at all. Instead, the proof-of-stake validators assume this role and will be responsible for processing the validity of all transactions and proposing blocks.
Redstone Upgrade
Rocket Pool launched in November 2021 when the Beacon Chain was a separate chain that ran in parallel to the main Ethereum Proof of Work chain. With The Merge ™️ and the full transition to Proof of Stake, we are introducing our first major upgrade to the Rocket Pool Protocol to accommodate several new changes which this transition will bring.
We worked hard on listening to all Rocket Pool users with these changes and we truly hope they will benefit all decentralised staking users, both liquid stakers with rETH and our beloved network of decentralised node operators.
Priority Fee Distributor
After The Merge ™️, smart node operators and their minipool validators will be responsible for creating blocks and in doing so, they will begin receiving priority fees (also known as tips) which are attached to each transaction. This new distributor makes sure these fees are split between the node operator and rETH liquid staking users, just like Beacon Chain rewards now.
But how does this work? Rocket Pool is designed to fairly distribute these rewards, the same way it fairly distributes your Beacon chain rewards: half of any priority fees your minipool validators earn will go to you (plus the average commission of all of your minipools), and the other half will go to the pool stakers (minus your average commission).
Your fee distributor is actually a unique contract that's specific to your node. It will hold all of the priority fees you've earned over time, and it contains the logic required to fairly split and distribute them. This distribution process is controlled by you (the node operator), and can be done whenever you please. It does not have a time limit.
Since priority fees are paid in ETH, and they are provided directly to your fee distributor contract every time one of your minipool validators proposes a block, you don’t have to wait for withdrawals to access your priority fees! They are simply awarded to you as part of the block proposal process and you can withdraw them as you wish from your fee distributor contract.
New Rewards System
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 penalised and the protocol is made whole to protect the value of rETH. Node operators who stake this RPL are also rewarded every 28 days from the protocol for providing this insurance.
The RPL rewards system has now had had a complete overhaul. The way node operators receive their RPL rewards is now much more flexible and gas efficient. Currently you would have to make an onchain claim every 28 days which can be costly depending on how busy the Ethereum network is at the moment the claim is made.
With the new rewards system, claiming one rewards interval is 8x more efficient than the current system and claiming ten intervals is 40x! It is also significantly more flexible. Save a years worth and claim all at once when gas is super low? No problem. Claim every period just like you do now? Also no problem.
Smoothing Pool
One final exciting new feature of the Redstone update is the Smoothing Pool. After The Merge ™️, block proposals will include these priority fees mentioned earlier. Getting these proposals isn’t always easy though, especially if you just run a single minipool validator.
The new Smoothing Pool is an opt-in feature that will collectively pool the priority fees of every member opted into it. This is a way to effectively eliminate the randomness associated with block proposals on the Beacon Chain.
In essence, the Smoothing Pool is a way to effectively eliminate the randomness associated with priority fees and MEV/inclusion fees. If you’ve ever had a streak of bad luck and gone months without a proposal, you may find the Smoothing Pool quite exciting.
rETH Transfer Delay
When you deposit ETH and receive rETH, it is currently locked from being transferred for 24hrs. This is done as a security measure to prevent sandwiching attacks.
With Redstone however, this 24hr lock has now been removed, instead when you trade rETH for ETH, a single days worth of rewards subtracted from the total trade amount which prevents sandwiching attacks. On top, this also better supports 3rd party integrations where rETH is minted.
Ropsten Testnet
If Redstone has got you a little hot under the collar, you can give it a test drive right now on the Ropsten Testnet which has just recently completed The Merge ™️. We’ve deployed Rocket Pool to Ropsten and implemented the Redstone upgrade which is being tested by our community currently.
If you wish to test it out yourself, you can do so as a liquid staker or smart node operator.
Contract Addresses
If you wish to add tokens to MetaMask or just probe the contracts manually, you’ll need the following Ropsten addresses.
‣ rETH: 0x00651FC69eFd13F76fC7dEBC2540F2662A09fa8c
‣ RPL: 0x1b1B5F829d16F6ee9266dB60484D6a34C9249134
‣ OLD RPL: 0xe138F0Be84AF4C48a6aAc2BFC73503d7985D5501
‣ Storage: 0x2b43C0b8e44FD03aa5C2866ba380fBcB646A1D42
Liquid Staking with rETH
About as easy as staking gets, just go to https://ropsten.rocketpool.net, switch your MetaMask to the Ropsten chain and deposit some testnet ETH for rETH.
Smart Node Operator
If you wish to test out Redstone as a node operator, you’ll need to download our Beta Smart Node stack and sync the Ropsten testnet. First download the appropriate client for your platform (x64 if you’re not sure what that is).
Example for x64 Linux systems: ‣ wget https://github.com/rocket-pool/smartnode-install/releases/download/v1.5.0-a2/rocketpool-cli-linux-amd64 -O ~/bin/rocketpool
Example for ARM Linux systems: ‣ wget https://github.com/rocket-pool/smartnode-install/releases/download/v1.5.0-a2/rocketpool-cli-linux-arm64 -O ~/bin/rocketpool
Then run rocketpool service install on a fresh system or rocketpool service install -d on a system with an existing configuration to install it.
For in-depth documentation on how to use the new features in Redstone, please use our docs @ https://docs.rocketpool.net/guides/redstone/whats-new.html
Questions or just say hello!
Well 9 points to you for making it this far! If you have questions, feedback, bug reports 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 chat room that anyone can join. If chat rooms aren’t your thing, we’re also on Twitter!
About Rocket Pool
Rocket Pool is Ethereum’s most decentralised liquid staking protocol. Its 1,300+ worldwide node operators have staked over 200,000 ETH representing over 1.5% of all Ethereum staked.
Liquid stakers can participate by depositing as little as 0.01 ETH to receive the rETH liquid staking token. Rocket Pool is a fully non-custodial solution, and its node operators are economically-aligned to perform well for stakers.
Joining as a node operator is fully permissionless and requires just 16 ETH (instead 32). A boosted ROI is provided from both operator commission plus RPL rewards. For more information check out our node operator guide.
The Rocket Pool team have been in the staking space since its inception in 2016, which gives them a pedigree and track record without peer.
Take a look at the Rocket Pool website | Join the Rocket Pool community on Discord | Stay up to date with the latest news on Twitter | View all links on our Linktree
