Rocketpool Part1 short script
Rocketpool is a base-layer Ethereum 2 staking pool protocol. Rocketpool is unique and powerful because it is neutral, decentralized, and non-custodial. Any service or project may build on top of Rocketpool to directly interact with ETH2 staking and rewards.
In this explainer video, we will take a high level look at how Rocketpool provides valuable infrastructure for Ethereum 2.0.
Rocketpool’s smart contracts coordinate trustless pooling and staking amongts many actors. Any dApp, wallet provider, DEX or centralized entity may leverage Rocketpool in the background to provide staking service for their users.
Be it from hobbyists or professionals, individuals or DAOs; Rocketpool is built to handle any size deposit in exactly the same way.
First, let’s look at the experience of an individual who would like to stake just .01 ETH. The individual will navigate to any application running on the Rocketpool network and deposit their .01 ETH. Rocketpool will then mint and return a staking token called rETH. This staking token is an IOU which Rocketpool will honor in exchange for the ETH and staking rewards it represents. That’s it. The process is the same for a DAO which deposits 10… 1,000… or even 100,000 Ether.
Next, Rocketpool smart contracts rearrange deposited ETH, forming 4 ETH chunks. Smart contracts then distribute these chunks in a pseudo random fashion amongt thousands of nodes, all over the world. These nodes will stake the ETH allocated to their minipools, accruing ETH2 staking rewards for the entire network.
Nodes may join or leave Rocketpool’s network at any time, in a permissionless manner. Node operators may be individuals or businesses, running anywhere from one minipool, to hundreds. To ensure good validator behavior, Rocketpool places a well designed risk and reward system upon its operators.
In order to collect commission fees and other rewards, an operator must provide 1/2 of the ETH to their pool and agree to absorb penalties incurred due to any poor performance of their node.
Rocketpool node operators will earn a commission for their service, as well as newly minted RPL rewards. RPL is the native coin of the Rocketpool network. RPL is required to bond a new node and will be used to incentivize many actions throughout the network, as well as protect user deposits. RPL tokenomics will be detailed in Rocketpool explainer Part 3.
Rocketpool is unlike any other staking pool service because Rocketpool is a neutral base-layer staking pool protocol, a valuable money lego in the Ethereum ecosystem. Ethereum 2 was designed to further decentralize the EVM consensus mechanism, and Rocketpool will assist in this vision.
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