Rocket Pool Launches Into Orbit

The shift towards Proof of Stake (PoS) systems in recent years opened the floodgates for the crypto staking industry. Users that wish to participate in a network’s staking process directly may choose to run their own node and become a validator. This active role of securing the network entitles them to a portion of the network’s staking rewards. However, running a validator is no small task. Validators typically must deal with capital lockup, a significant minimum capital requirement, and the technical knowledge to ensure 24/7 functionality. Liquid staking derivatives are in the early stages of solving the lockup problem as this feature is not built into PoS networks. To mitigate the minimum capital requirement and technical knowledge barriers, most protocols support native staking delegation to validators within the network. This lets small players assign their stake to larger validators while still earning staking rewards (minus a small commission fee).

Ethereum 2.0 (ETH2) is unique among its smart contract competitors in that it does not support native staking delegation. Instead, the network relies upon third parties to create delegation services that bring staking to the masses. After five years of initial development, Rocket Pool successfully launched its mainnet this week in an effort to create a community-owned, decentralized, and trustless staking infrastructure service for the ETH2 network.

Aligned Ethos

The idea for Rocket Pool was originally conceived in 2016 by software developer David Rugendyke. Since then, it has developed as a community-driven project with an emphasis on decentralization and trustless staking. Prior to Rocket Pool’s launch, ETH2 staking providers have been built with trust assumptions varying from centralized exchange custody to progressive decentralization roadmaps. Rocket Pool’s model relies completely on smart contract interactions meaning it could not afford to launch with centralized entities custodying withdrawal keys for its deposits. For this reason alone, Rocket Pool was unable to consider launching until ETH2 developers implemented smart contract withdrawal support earlier this year.

Rocket Pool was originally scheduled to deploy on the Ethereum mainnet on October 6th. However, a vulnerability that impacted ETH2 staking providers was discovered by Rocket Pool’s competitor StakeWise just before the launch. Following the patch, the first stage of Rocket Pool’s mainnet rollout was successful on November 9th.

Protocol Design