Everything You Wanted To Know About Rocket Pool

The Beacon chain has transitioned Ethereum to a proof-of-stake consensus mechanism, which is more stable, secure, and eco-friendly.

The beacon chain, also known as the network, lets users stake Ether (ETH) to support the change. But it takes work. When it comes to Rocket Pool Price, it costs about $50,000 to stake Ether and become a beacon validator.

Users who don't meet these requirements must join staking pools, where they pool their resources. Staking pools facilitate centralization, which increases fraud risk.

A decentralized, open-source protocol called Rocket Pool, proposed by an Australian developer, was popular. ETH 2.0 can be staked with as little as 0.01 ETH.

Rocket Pool: What Is It?

The protocol lets people stake on Ethereum 2.0 without getting Ethereum 2.0 credentials. To run a node outside Rocket Pool, you'll have to stake 32 ETH. Ethereum 2.0 validators can join Rocket Pool for half the price, 16 ETH.

Staking-as-a-service is something Rocket Pool offers to node operators, along with staking opportunities. Rocket Pool has staking-as-a-service providers for users who need the technical skills and hardware to stake. If you want to stake as little as 0.01 ETH, you don't need to assemble any technical framework.

Rocket Pool: A Brief History

Vitalik's Mauve Paper, published in 2016, inspired Rocket Pool, a decentralized protocol. David Rugendyke, an Australian blockchain developer, started Rocket Pool after learning about Ethereum's impending proof-of-stake move.

Rugendyke predicted there would be a gap in validators. The Ethereum 2.0 network requires validators to deposit 32 ETH and have high-spec equipment (a computer with a CPU processor, four cores, and a minimum clock speed of 2.80 GHz).

These requirements created a gap in validators, which created barriers to the network.

Rugendyke pioneered Rocket Pool's solution as CTO, working with Darren Langley, a software engineer now General Manager.

Rocket Pool: How Does It Work?

DAOs and smart contracts are the two main things to consider regarding Rocketpool.

Rocket Pool has two major DAOs: the Protocol DAO and the Oracle DAO. The Protocol DAO determines whether changes need to be made to the protocol, whereas the Oracle DAO is more integral to Rocket Pool's base technology.

The Rocket Pool technology runs on ETH 1.0, and the validating processes run on ETH 2.0. Currently, both chains are running simultaneously. Smart contracts on chain 2.0 can't access a transaction's status on chain 1.0. Oracle DAOs make Oracle services and network uptime available to the protocol and users.

Oracle DAO is a group of oracles, which means data sent to smart contracts on ETH 1.0 already has a majority consensus. Oracle DAO members validate mini pool statuses (validators of the Rocket Pool protocol!) and provide accurate RPL: ETH ratios.

Oracle DAO nodes make Rocket Pool's smart contracts work. Without them, we wouldn't be able to stake ETH, receive rETH, or calculate APY.

Rocket Pool: What makes it different?

The Rocket Pool has over 200,000 stakes and over 1000 nodes, making it the most active protocol on the beacon chain. It has a few features that make it popular among DeFi users, such as:

1. Decentralization - A Rocket Pool protocol DAO, which uses the RPL governance token, facilitates community agenda development. The community decides on protocol improvements, and no single entity is responsible for making decisions.
2. Dual token model - The Rocket Pool protocol has two token options catering to different investor groups' needs. RPL, its governance token, acts as a native token in DAOs, while rETH, its liquidity token, serves as a proof of stake token.
3. Open source - The Rocket Pool aims to give DeFi users more stake opportunities on the beacon chain. There are many different types of people on the beacon chain, including independent node operators, Ethereum holders, SaaS providers, and pool stakeholders. A smart contract run on the protocol is transparent and can be accessed by anyone.
4. Security - Rocket Pool's protocol prioritizes security. Mainstream blockchain security companies audit the platform, and users who report suspicious activity get rewards. Also, users can't unstake their funds within 24 hours of staking them to prevent malicious activity. Finally, socialized risk management allows losses from ETH slashing to be absorbed by the whole protocol instead of a single node.
5. Oracle DAO and protocol DAO - Rocket Pool is backed by two DAOs that distribute funds fairly. RPL governance token holders are members of Protocol DAO, responsible for various settings across the protocol. Oracle DAO nodes report data across the beacon chain and Ethereum mainnet.

Conclusion

A PoK consensus algorithm replaces Ethereum's PoS protocol, enabling new dApps. Rocket Pool uses these new possibilities to make Ethereum even more accessible to developers.

You can stake as little as 0.01 ETH, have liquidity, and withdraw money. That's great for cryptocurrency users wanting to stake Ethereum for profit or to help out the ecosystem.

Rocket Pool lets you increase your cryptocurrency balance and help Ethereum.