Rocket Pool functions as a decentralized staking pool for Ethereum, providing an Annual Percentage Rate (APR) of up to 4.33% for ETH2 staking. Participants can engage with the network through its decentralized node operators or operate their own nodes by locking just 16 ETH. Those who run their own nodes receive a commission on staked ETH and gain extra RPL rewards by supplying RPL collateral, which can raise total returns to an APR of up to 6.36% for the ETH portion plus the additional RPL incentives.

The protocol enables liquid staking, allowing users to profit from a rising exchange rate rather than increasing their initial staked amount, a method that avoids triggering taxable events. It also features smart nodes, proprietary software that permits anyone to operate a node within the ecosystem. Because losses from malfunctioning nodes are spread across the entire network, individual participants face reduced risk of penalties. This structure relies on open-source, audited smart contracts that ensure staking remains fully non-custodial and maintains a high level of decentralization.

David Rugendyke, a senior developer with a computer science background, initiated the design of Rocket Pool in late 2016 and launched the project. He is assisted by General Manager Darren Langley, an executive who brings more than 18 years of commercial experience in mentoring and managing development teams, designing application architecture, and delivering digital products for the financial services and government sectors. Rounding out the team are three Solidity and blockchain engineers who possess a combined total of 40 years of experience.

Rocket Pool allows individuals to join ETH2 staking without needing significant capital or advanced technical skills. The platform’s foundation is trustless staking, where decentralized autonomous nodes are secured by RPL collateral.

Rather than replacing staking-as-a-service providers, Rocket Pool aims to complement them. These providers can boost their earnings by operating nodes within the network, earning rewards in both ETH and RPL. For instance, a large entity like Gemini could utilize Rocket Pool by establishing nodes that each stake 16 ETH. This process involves rETH, Rocket Pool’s wrapper for staked Ether.

rETH represents tokenized staked ETH, enabling participation with amounts ranging from 0.01 ETH to 32 ETH. When users stake their Ether, they get rETH, which grows in value as staking rewards accumulate based on the overall performance of the node operator network. Slashing risks are mitigated through insurance mechanisms, as node operators lock up RPL as collateral against potential penalties.

The second interaction method is Node Staking. Participants deposit 16 ETH and receive another 16 ETH matched from the pool of users who deposited ETH for rETH. Effectively, you stake your own 16 ETH plus 16 ETH on behalf of the protocol. Rocket Pool dynamically adjusts its commission rate according to the balance between available ETH and the supply of node operators. Under this structure, node operators earn rewards for insuring stakers against slashing or penalties, and they are required to maintain a minimum RPL collateral deposit.

Unlike many DeFi tokens with a fixed supply, RPL implements a 5% annual inflation rate. The protocol maintains that rewarding participants is essential for any value-generating system, arguing that a fixed-supply model would force users to bear the cost of this value generation instead.

Newly minted RPL tokens are distributed in the following manner:

• Node Operators who stake RPL as insurance collateral receive 70%
• Oracle DAO members who provide various oracle data receive 15%
• The Protocol DAO Treasury, which funds decentralized development, receives 15%

This structure aims to incentivize key stakeholders and support further decentralized development. The Oracle DAO is composed of node operators tasked with ensuring accurate data reporting to the protocol, while the Protocol DAO manages the treasury. As of the time of writing, the circulating supply of RPL stands at just over 10 million.

Rocket Pool operates as an ERC-20 token on the Ethereum network. To ensure security, the protocol has undergone successful audits by three distinct firms: Sigma Prime, Consensys Diligence, and Trail of Bits. Additionally, it maintains a bug bounty program to encourage the identification of vulnerabilities.

Governance is divided between the Protocol DAO and the Oracle DAO. The Protocol DAO manages parameters such as RPL inflation, rewards, auctions, node staking requirements, commissions, and deposits. The Oracle DAO connects smart contracts on the Beacon Chain with the ETH1 main chain. Its membership includes major ETH2 staking clients such as Lighthouse, Nimbus, Prysm, ConsenSys Codefi, Blockchain Capital, and Bankless, among others.

You can purchase RPL on UniSwap (V3), Hoo, BKEX, XT.COM, Hotbit, and Bvnex.