Rocket Pool liquid staking

Rocket Pool is a decentralized liquid staking protocol for Ethereum that lowers both the technical and capital barriers to participate in securing the network. It accepts ETH deposits through smart contracts and issues a liquid staking token called rETH to represent each deposit and accruing rewards. rETH stays tradable and can be used across decentralized finance applications while it passively accumulates staking yield. The protocol splits responsibilities across on‑chain smart contracts, a distributed Smart Node network, and minipool validators that turn pooled capital into active validators. Node operators provide a partial stake, commonly 8 ETH, and the protocol top‑ups user deposits to reach the 32 ETH required to spin up a validator. When a minipool reaches the required stake, it becomes an active validator and earns network rewards that flow back to rETH holders. The native governance and insurance token, RPL, secures node operators by serving as collateral against poor performance or penalties. Operators stake RPL as insurance and are rewarded with additional RPL emissions for reliable service. The system therefore aligns economic incentives between stakers and operators while preserving decentralization through many independent nodes. The main benefits are clear and practical. Users can stake very small amounts, maintain liquidity via rETH, and still share in validator rewards. Aspiring operators can participate with a smaller ETH commitment than native solo staking and earn extra protocol incentives. Yet the model carries risks that every participant must weigh. Smart contracts can contain bugs and create exploit vectors despite audits. Lower per‑validator capital requirements may reduce the cost of controlling many validators and thus raise concerns about concentrated influence or attack vectors. rETH value can fluctuate relative to ETH depending on market demand and redemption mechanics. Governance structures that handle key off‑chain tasks can be a point of failure if compromised. Finally, protocol token inflation and changing network economics affect long‑term returns. In sum, liquid staking protocols like Rocket Pool democratize access to Ethereum staking and add composable liquidity to staked assets, but they do so by trading some of the simplicity and direct security guarantees of native staking for greater accessibility and utility.