What is Rocket Pool ETH (RETH)?

TLDR Rocket Pool ETH (rETH) is Ethereum’s decentralized liquid staking token, enabling users to earn staking rewards while maintaining liquidity for DeFi activities.

1. Liquid staking solution – rETH represents staked ETH and its accrued rewards, growing in value relative to ETH over time.
2. Decentralized architecture – Operates via a permissionless network of node operators, avoiding centralized control.
3. DeFi integration – Holders can use rETH as collateral or liquidity while earning staking yields.

Deep Dive

1. Purpose & Value Proposition

rETH solves Ethereum’s staking liquidity problem. Traditional staking locks ETH until withdrawals are enabled, but rETH lets users stake ETH while retaining flexibility. The token’s value increases daily as staking rewards compound, bypassing the need to wait for validator exits. This makes staking accessible to small holders (minimum 0.01 ETH) and institutions alike (Rocket Pool).

2. Technology & Differentiation

Rocket Pool uses a decentralized network of node operators who stake 16 ETH (vs. Ethereum’s 32 ETH requirement), with the protocol crowdsourcing the remaining 16 ETH from users. This lowers entry barriers for validators while maintaining Ethereum’s security. Unlike centralized alternatives, Rocket Pool doesn’t control funds or validator keys – node operators run automated software, and rewards are distributed trustlessly via smart contracts.

3. Tokenomics & Use Cases

rETH isn’t a rebasing token; its value appreciates against ETH as staking rewards accrue. For example, 1 rETH might equal 1.05 ETH after a year. This design simplifies integration with DeFi protocols like Aave or Uniswap, where rETH functions as yield-bearing collateral. Node operators earn additional RPL token rewards, aligning incentives for network participation.

Conclusion

rETH fundamentally reimagines staking by combining Ethereum’s security with decentralized liquidity. Its automated, non-custodial model contrasts with custodial services, offering censorship resistance and self-custody benefits. How might Rocket Pool’s node operator requirements evolve as Ethereum’s validator ecosystem matures?