What is Rocket Pool and rETH?
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Rocket Pool is a liquid staking protocol for Ethereum that allows users with less than 32 ETH to collectively fund new validators and receive rewards. Rocket Pool outsources the technical and operational complexity of operating an Ethereum validator to permissionless validator operators subject to certain requirements.
When you deposit ETH into Rocket Pool, you receive Rocket Pool's liquid staking token, rETH, which represents your proportional claim to ETH in Rocket Pool. As validators operating on Rocket Pool receive rewards, you are eligible to receive rewards proportional to your stake, which is typically expected to occur daily.
When you send ETH to be staked in Rocket Pool, Rocket Pool subtracts a 0.05% fee and then converts your ETH to rETH. The conversion rate is calculated according to your proportional claim to ETH on the Rocket Pool protocol.
For example, if Rocket Pool's conversion rate is “1 rETH = 1.1 ETH” and you were to send 1 ETH to Rocket Pool to stake:
- Rocket Pool would take a 0.0005 ETH fee, leaving you with 0.9995 ETH to be staked.
- Your 0.9995 ETH would convert to ~0.90863 rETH at the “1 rETH = 1.1 ETH” conversion rate.
- You would receive ~0.90863 rETH to represent your stake with Rocket Pool.
Staked ETH and rewards received on Rocket Pool can usually be withdrawn at any time after staking. For more information, see here.
To learn more about Rocket Pool rewards, see here.