Rocket Pool
Rocket Pool is a decentralized Ether staking service that pools Ether from investors to stake across a network of validators.
- Documentation
- Auditors
- Please see our FAQ on experienced auditors
- Website
- Token: RPL
- Tags: Liquid Staking
- TVL: $2.5B (Rank #5)
- TVL Ranking by Liquid Staking: #2
- Blockchain: Ethereum
- Chain TVL
- Ethereum: $2.52B
- Code reviewed by several experienced auditors including Sigma Prime, Trail of Bits and ConsenSys
- Public team promotes accountability
- No documented protocol hacks since launch
- Latest protocol version launched in 2023; maturity over six months reduces technical risk as smart contracts are moderately battle-tested
- Top 5% by total value locked reduces risk
- Multisig wallet controls protocol upgrades
- Multisig consists of at least 4 signers, which means the protocol is less susceptible to centralization risks
- Timelock is at least 48hrs, which provides users with sufficient time to exit if any malicious upgrades are approved
- Low voting power concentration reduces risk
- No death spiral concerns
- This protocol is susceptible to risks related to staking a token to secure a network, such as slashing events
How Rocket Pool works
Rocket Pool allows users to earn ETH staking rewards without locking ETH or maintaining staking infrastructure. Users deposit their ETH into Rocket Pool's smart contracts and receive rETH in return that represent the value of the user's staked assets along with any staking rewards accrued or penalties inflicted on validators. ETH redemptions are not possible until the Shanghai upgrade, which is expected sometime in 2023; until then, rETH can be transferred or traded on exchanges. Rokcet Pool is curretnly the most decentralized staking protocol as it allows anyone to become a node operator. The node operators are reponsible for operating the protocol's minipools, which are custom Ethereum validators that pair the node operator's ETH with user deposited ETH. This structure enables node operators to participate in ETH staking with just 16 ETH versus the standard 32 ETH requirement. Node operators are also required to bond the protocol's native RPL token onto their minipools as insurance against misbehaviors. Node operators receive newly issued RPL proportional the the amount of RPL bonded to their minipool (min of 10% and max of 150% ratio), as well as a commission from staking rewards. The value of rETH is protected against slashing penalties and downtime due to the built-in insurance mechanisms. rETH is also redeemable for ETH only when there is sufficient liquidity in the user deposit pool to support the trade.
How Rocket Pool makes money
Rocket Pool generates revenue by charging a 14% fee on the staking rewards earned by ETH depositors. Unlike Lido which distributes a portion of the fees to the DAO treasury, node operators on Rocket Pool earn the entire fee.
How you make money on Rocket Pool
You can generate additional yield on top of your ETH by depositing into Rocket Pool to participate in the Ethereum PoS validation mechanism to earn block rewards. The unlocked liquidity with rETH can also be redeployed within a number of popular DeFi protocols to generate additional yield on top of the staking rewards. Lastly, you can operate a node on Rocket Pool to earn commissions and protocol rewards.
