Rocket Pool is a first-of-its-kind ETH2 Proof of Stake Protocol, designed to be community-owned, decentralized, trustless, and compatible with staking in Ethereum 2.0. It was first conceived in late 2016 and has since had over 5 successful public betas over the life span of ETH2 development. Rocket Pool is designed to cater to two main user groups; those that wish to participate in tokenized staking using $rETH (opens new window)using as little as 0.01 $ETH and those that wish to stake $ETH and run a node in the network to help generate a higher ROI than staking outside of the protocol due to commissions earned. The core premise behind a protocol is to ensure the network is not beholden to any one party. This is a principle directly linked to Ethereum and ETH2 itself, and a mindset used at every stage of the process as Rocket Pool has evolved.
Rocket Pool provides liquid staking, meaning users benefit from an increasing exchange rate instead of rebasing their staked collateral. Furthermore, Rocket Pool offers smart nodes: a custom node software allowing anyone to run a node on its network. With losses from bad nodes socialized across the network, users minimize their risk of facing penalties. This is supported by the pool’s open-source and audited smart contracts, which guarantee fully non-custodial staking and decentralization.
$rETH is a tokenized version of the staked $ETH in Rocket Pool, which allows stakers to engage from 0.01 $ETH to up to 32 $ETH. By staking their Ether, users receive $rETH in return, which automatically accrues staking rewards based on the performance of the entire network of node operators. The value of $rETH is protected against slashing through insurance mechanisms, with node operators staking $RPL on nodes as collateral for any penalties they incur.