What Is Rocket Pool (RPL)? Complete Guide & Review About Rocket Pool

What Is Rocket Pool (RPL)?

Rocket Pool is a first of its kind ETH2 Proof of Stake Protocol, designed to be community owned, decentralised, 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 Coin is designed to cater to two main user groups; those that wish to participate in tokenised 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.

For more information on these two groups that make up the protocol, we’d highly recommend reading article one in explainer series (opens new window)that goes into great detail on how users can participate, be it via tokenised staking or running a node in the protocol.

Rocket Pool 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 has evolved.

Important Points Table Of Rocket Pool

How to Buy the Continental & Trade On Exchange?

How does Rocket Pool work?

Liquid Staking

Innovative liquid staking token that accrues while using an increasing exchange rate, rather than rebasing which is better for DeFi and better for tax reporting.

Smart Contracts

Open source, audited smart contracts ensure funds are never in the custody of node operators.

Smart Nodes

With custom node software any user/business/group can run a node on our network, stake their own ETH for free and generate a higher return.

Minimised Penalty Risk

Any losses that occur from bad nodes for stakers who deposit ETH are socialized across the whole network to minimize impacts on any single user.

Infrastructure

Network redundancy and decentralization are key pillars of the Rocket Pool network. Any potential issues and their effects are minimised using this technique.

Experience

Rocket Pool was originally designed in late 2016 using the Mauve Paper which was released by Vitalik. We’ve been in the space now longer than most, and it shows.

Security

Sigma Prime

Have an extensive background in information security, blockchain, and system design. They perform in-depth security assessments for decentralised systems. Sigma Prime also maintains the Lighthouse Ethereum consensus client.

Consensys Diligence

As one of the most experienced teams in the space, ConsenSys Diligence is at the cutting edge of offensive cryptography, blockchain technology, and cryptoeconomic incentive analysis.

Explainer Series

Everybody loves a good explainer series! For the best detailed understanding of how a ETH2 staking protocol works, checkout this article series that goes into great detail over four different articles!

Who Are the Founders of Rocket Pool?

Rocket Pool was launched by David Rugendyke, a senior developer with a computer science background who started designing Rocket Pool in late 2016. He is supported by General Manager Darren Langley, an executive with over 18 years of commercial experience in managing and mentoring development teams, designing application architecture, and delivering exciting digital products for government and financial services. The team is complemented by three blockchain and Solidity engineers with a combined 40 years of experience.

What Makes Rocket Pool Unique?

Rocket Pool essentially offers anyone to participate in ETH2 staking, regardless of their capital investment or level of technological sophistication. Its core premise is to enable the trustless staking of ETH to a network of decentralized autonomous nodes that are underpinned by RPL collateral.

Rocket Pool sees itself as a complement to staking-as-a-service providers. These providers can choose to maximize returns by joining Rocket Pool and running a node, which they receive rewards in ETH and RPL for in return. In this manner, even a big player like Gemini could use Rocket Pool by creating nodes that stake 16 ETH each. This is where Rocket Pool’s staked ETH wrapper rETH comes into play.

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.

The second way of interacting with Rocket Pool is through Node Staking. Users can deposit 16 ETH and are assigned an additional 16 ETH from users who are depositing ETH and receiving rETH. In essence, you stake your own 16 ETH and 16 ETH on behalf of the protocol. Rocket Pool automatically adjusts its commission rate based on the supply and demand of node operators and available ETH. With this model, node operators are rewarded for providing insurance for stakers in case they are penalized or slashed. Furthermore, node operators must deposit a minimum amount of RPL as a collateral.

How Many Rocket Pool (RPL) Coins Are There in Circulation?

RPL follows a different approach than most fixed-supply DeFi tokens and introduced a 5% annual inflation. The protocol argues that any value-generating protocol will need to reward its participants. A fixed-supply model would result in this value being generated at the expense of its users.

The newly issued RPL tokens will be emitted as follows:

• Node Operators staking RPL as insurance collateral (70%)
• Oracle DAO members providing various oracle data (15%)
• Protocol DAO Treasury to fund decentralized development (15%)

This model is designed to incentivize the protocol’s key stakeholders and funds further decentralized development. The Oracle DAO members consist of node operators, ensuring that oracle data is reported correctly to the protocol, while the Protocol DAO governs the protocol’s treasury. At the time of writing, the supply of RPL is just over 10 million.

How Is the Rocket Pool Network Secured?

RPL is an ERC-20 token on Ethereum. Rocket Pool has been successfully audited by three separate firms: Sigma Prime, Consensys Diligence, and Trail of Bits. It also runs a bug bounty program to incentivize keeping its protocol safe.

Furthermore, governance of Rocket Pool is split across its Protocol DAO and Oracle DAO. The Protocol DAO is responsible for settings like RPL inflation, rewards, and auctions, the staking requirements and commissions for nodes, and deposits. The Oracle DAO bridges the smart contracts between the Beacon Chain and the ETH1 main chain. Members of the Oracle DAO are several big ETH2 staking clients like Lighthouse, Nimbus, Prysm, ConsenSys Codefi, Blockchain Capital, Bankless, and others.