Rocket Pool is a decentralized Ethereum (ETH) staking protocol designed to lower the capital and technical barriers to entry for participating in Ethereum's Proof of Stake (PoS) consensus mechanism. Since the transition of Ethereum to PoS, staking requires a deposit of 32 ETH to run a validator node, which presents a significant financial hurdle for many users. Rocket Pool addresses this by pooling user funds together.
The protocol provides two primary avenues for participation. First, users can stake as little as 0.01 ETH into the staking pool. In return, they receive a liquid staking token called `rETH`. This token represents their staked ETH plus any accrued staking rewards. The value of `rETH` appreciates against ETH over time as the network of validators earns rewards. A key feature of `rETH` is its liquidity; it can be freely traded, sold, or used as collateral in various decentralized finance (DeFi) applications, allowing stakers to earn yield without their capital being locked.
Second, for users who have the technical expertise to run a validator but lack the full 32 ETH, Rocket Pool allows them to become a node operator with a reduced minimum of 8 or 16 ETH. This deposit is combined with ETH from the general staking pool to fund a new validator. In exchange for running this infrastructure, node operators earn a commission on the rewards generated by the pool's ETH and also receive rewards in `RPL`, the protocol's native token. `RPL` is also staked by node operators as a form of insurance or collateral.
By enabling a permissionless and geographically diverse network of node operators, Rocket Pool aims to bolster Ethereum's decentralization and censorship resistance. Its non-custodial design, which is managed by smart contracts, ensures that users maintain control of their funds without needing to trust a centralized intermediary. This makes it a significant piece of infrastructure within the liquid staking ecosystem on Ethereum.