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Learn about Rocket Pool Staking
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:
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.
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.
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.
Whilst we want to ensure staking is as safe and transparent as possible, there are still things to consider regarding whether a specific staking option is right for you.
Slashing risk: When staking ETH through Rocket Pool, there is a risk of being partially or fully slashed if the validator misbehaves. Validators are penalized for small amounts of ETH if they are offline and fail to perform their assigned duties. This is called leaking. If a validator violates one of the core rules of the Beacon chain and appears to be attacking the network, it may get slashed. Slashing is a forceful exit of your validator without your permission, accompanied by a relatively large fine that removes some of your validator’s ETH balance.
There are three possible penalties that a validator could incur:
- Missed attestation – 0.000011 ETH* per attestation (-9/10 the value of a normal attestation reward)
- Missed sync committee – 0.00047 ETH* per epoch (-0.1 ETH total if offline for the whole sync committee)
- Slashing – At least 1/32 of your balance, up to your entire balance in extreme circumstances
The RPL that Node operators stake when setting up their node acts as insurance to reimburse regular users in the event that the node operator exits staking with less than 16 ETH in their validators. In the event of slashing or leaking, the RPL that was staked will be sold to cover the penalties incurred to protect regular users.
Unbonding risk: When running a mini pool through Rocket Pool, there is currently an indefinite lockup period, meaning that it is a one way transaction. Ethereum Staking withdrawals are set to be enabled in the Shanghai upgrade that is planned in March/April of 2023. This means that Node Operators will not be able to unstake their tokens immediately, but instead need to wait until withdrawals are enabled before they can get access to their ETH. Keep in mind that you can exit your mini pool before the Shanghai upgrade, which will stop your minipool from validating (or being penalized for missing attestations). However, you cannot get your funds and rewards back until withdrawals have been enabled. This is something to keep in mind when deciding to stake, as crypto markets are highly volatile. Consider keeping funds liquid if you do not intend to hold ETH long-term.
In the case that you have staked your ETH in the Rocket Pool staking pool, you would have been issued a LST called rETH. If you wish to exit the pool, you can simply trade your rETH for ETH on a secondary market to exit the pool.
Protocol security risks: There is an inherent risk that the protocol could contain unknown bugs. This not only applies to staking but your RPL investment in general.
Please note that this is not an exhaustive list of all the risks related to staking.
RPL is the governance token of Rocket Pool and is used to carry out the key functions of the protocol as detailed below:
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.
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.