As a Rocket Pool staker, your role is to deposit ETH into the deposit pool which will enable a node operator to create a new Beacon Chain validator. You do not have to ‘choose’ a validator, your ETH goes into the deposit pool and new node operators are created from there.

RPL is the governance token of Rocket Pool and is used to carry out the key functions of the protocol as detailed below:

Token Utilities:

Staking Insurance: When creating a 16 ETH minipool validator in the protocol, a minimum of 10% of that ETH’s value must also be staked in RPL as a security promise to the protocol. The insurance promise acts as collateral, where if the node operator is penalised heavily or slashed and finishes staking with less than 16 ETH, their collateral is sold for ETH via auction to help compensate the protocol for the missing ETH.

Governance: RPL is used to vote on governance proposals on the network.

After staking your RPL, there are a few things to keep in mind:

For Node Operators:

• Node operators can create as many mini pools as they can afford, all running happily on the same machine together. Each minipool has a negligible impact on overall system performance; some people have been able to run hundreds of them on a single node during Rocket Pool’s beta tests.
• Node Operators can participate in Rocket Pool’s DAO where they can vote on changes to the smart contracts.
• Node operators can join the Smoothing Pool. The Smoothing Pool is a unique opt-in feature of the Rocket Pool network that is available to node operators. Essentially, it becomes the fee recipient for every node operator that opts into it and collectively accumulates the priority fees from blocks proposed by those node operators into one large pool. During a Rocket Pool rewards checkpoint (the same ones used to distribute RPL rewards), the total ETH balance of the pool is distributed fairly to the pool stakers and the node operators that opted into it.
• Node operators need to monitor their node’s performance and do so using the host of resources on the Rocket Pool website.

Rocketpool is a decentralized staking pool on top of Ethereum, and therefore enables users to stake on the Ethereum network and does not reach consensus itself.

RPL is an inflationary token with new tokens minted every four weeks. Rocket Pool implements a 5% annual emission over a 10-year period to increase the total supply to just under 30 million tokens. It also gives the protocol a source of funding through 5% yearly inflation (70% of that goes to yield for staked RPL, 15% goes to the oracle DAO, 15% goes to the protocol DAO treasury)

Initial Token Distribution

• 54% was allocated to investors.
• 31% was reserved for airdrops and pre-mined rewards.
• 5% went toward the founders and project costs.

Only Rocket Pool Node Operators can stake RPL tokens. 

When creating a 16 ETH minipool validator in the protocol, a minimum of 10% of that ETH’s value must also be staked in RPL as a security promise to the protocol. The insurance promise acts as collateral, where if the node operator is penalised heavily or slashed and finishes staking with less than 16 ETH, their collateral is sold for ETH via auction to help compensate the protocol for the missing ETH. 

To set up a Rocket Pool Node and stake RPL please see the detailed guides below:

• Run a Local Node
• Run a Cloud (VPS) Node

The RPL rewards come from: 

Inflation: Rocket Pool implements a 5% annual emission over a 10-year period to increase the total supply to just under 30 million tokens. 70% of that goes to yield for staked RPL, 15% goes to the oracle DAO, 15% goes to the protocol DAO treasury. Node operators earn interest on the RPL they stake when setting up their node.

Please note that the total annual rewards are divided by all active stakers; hence, as the amount of staked tokens goes up, the reward rate goes down.